While researchers are aware that a mix of Local Ecological Knowledge (LEK), community-based resource management institutions, and higher-level institutions and policies can facilitate pastoralists' adaptation to climate change, policy makers have been slow to understand these linkages. Two critical issues are to what extent these factors play a role, and how to enhance local adaptation through government support. We investigated these issues through a case study of two pastoral communities on the Tibetan Plateau in China employing an analytical framework to understand local climate adaptation processes. We concluded that LEK and community-based institutions improve adaptation outcomes for Tibetan pastoralists through shaping and mobilizing resource availability to reduce risks. Higher-level institutions and policies contribute by providing resources from outside communities. There are dynamic interrelationships among these factors that can lead to support, conflict, and fragmentation. Government policy could enhance local adaptation through improvement of supportive relationships among these factors. While central government policies allow only limited room for overt integration of local knowledge/institutions, local governments often have some flexibility to buffer conflicts. In addition, government policies to support market-based economic development have greatly benefited adaptation outcomes for pastoralists. Overall, in China, there are still questions over how to create innovative institutions that blend LEK and community-based institutions with government policy making.