In the same way that aid can have mixed effects on sustainable development in small island states, aid can also have mixed effects on the capacity of small states to adapt to avoid impacts of climate change. This article describes the influence of aid on the financial resources and governance institutions required for successful adaptation to climate change in the aid dependent island country of Niue. It shows that while aid has generally had positive effects on the availability of finance, it has had generally negative effects on governance, undermining the legitimacy of government actions. The article argues that aid must be delivered with care and purpose if the adaptation it is intended to facilitate is to be effective, and not increase vulnerability to climate change.