Understanding the long-term dynamics of social-ecological systems is critical to better inform sustainable management. Since Holling’s adaptive cycle heuristic, published in 2001, substantial progress has been made to explore historical changes in agricultural, pastoral, and forest systems. However, the application of this heuristic in coastal fishery systems has been relatively rare. Using the Tam Giang Lagoon in Vietnam as an example of a rapidly changing environment, we explore the historical behavior of this tropical coastal social-ecological system (SES), associated livelihood pathways, and possible challenges for future livelihood adaptations through the lens of the adaptive cycle metaphor. Our analysis demonstrates that the present lagoon SES condition is the result of a series of historical events and reorganization attempts through two complete adaptive cycles. The lagoon’s future vulnerability is tied to the intensification of human uses, prolonged ecological degradation, and intensifying climatic hazards. We show how the evolution of the lagoon SES resulted in divergent livelihood pathways that bring benefits to some users but also cause persistent constraints and sometimes irreversible losses to other users in shared common pool resources. A one-size-fits-all fishery management approach is therefore ill-suited for improving diverse livelihoods. We recommend that fishery policies take seriously the heterogeneity in livelihood pathways for sustainable lagoon management. We end by reflecting on the usefulness of the adaptive cycle heuristic in systematically exploring historical dynamics and identifying underlying drivers and feedbacks between the social and ecological components of complex fishery systems.