The 2004 Indian Ocean tsunami, caused by a powerful undersea earthquake off the coast of Sumatra, resulted in unprecedented destruction across several coastal regions. The Andaman & Nicobar Islands, located near the epicenter, suffered significant loss of life, displacement, and environmental degradation. This paper provides a comprehensive analysis of the tsunami’s impact on the Andaman & Nicobar Islands, detailing the immediate effects, long-term consequences, and rehabilitation efforts. The paper also explores the economic, social, and psychological ramifications of the disaster, particularly on indigenous communities. Looking ahead, it emphasizes the importance of sustainable development, community-based disaster preparedness, and ecosystem restoration to build resilience in the region. The proposed way forward focuses on developing infrastructure that is disaster-resilient, improving disaster management systems, and empowering indigenous communities in rehabilitation efforts to ensure long-term recovery and resilience.