The study examined the role local institutionsplay in promoting adaptive capacity of households to environmental degradation in the Niger Delta region of Nigeria.The survey was conducted amongst 610 households across Rivers, Delta and Bayelsa states. The questionnaire instrument was employed ineliciting data from the respondents. The study shows that respondents belonged to about 106 formal and informal local institutions spreadacross the study communities. Findings revealed that local institutions serves as safety nets and sources of local insurance as they provide households opportunities for resources and materials exchange as well as galvanizing collective action that promotes livelihoods and adaptive capacity. The hypothesis test result indicated that membership to local institutions has a significant effect on adaptive capacity. The study hence concluded that membership to local institutions significantly promote the capacity of households to adapt to environmental degradation in the Niger Delta. The study hence recommends that the institutional capacities of these institutions should be enhanced through knowledge and resource sharing by means ofincreasingly engaging with external actors like the government and civil society who can provide external support to the communities.Keywords: LocalInstitutions, Adaptive Capacity, Rural Households, Niger Delta.