ABSTRACT: Changes in watershed management and policy in Hawaii are an instructive case study on the evolution of resource management from a traditional vertically integrated system, to a segmented central government‐based system, and now towards a community and watershed focus. The rise of European social and economic influences coupled with the precipitous decline in the Hawaiian population in the years following European contact led to the destruction of traditional management structures. Subsequently, the dominance of outside interests in Hawaii society and politics, culminating with the sugar industry, facilitated the unrestricted use and privatization of land and water resources. The post‐World War II era ushered in fundamental changes in Hawaii society and politics including renewed appreciation of traditional management practices. Government policies, increased community interest in resource management, and a renaissance in Hawaiian culture have converged in recent years to facilitate the development of new management structures that draw on both traditional and contemporary management. These structures hold great promise for improving Hawaiian watershed management. Our observations suggest that other jurisdictions may find it productive to examine traditional management and policy structures and try to relate them to contemporary community‐based resource management policies and activities.