This article critically analyzes institutional change as a consequence of humanitarian intervention in the tsunami-affected Nicobar Islands in India. It shows that the state and aid agencies distributed resources on the basis of formal rules and norms different from those observed by the Nicobarese. This has created social upheaval by diminishing the stature of the joint family system and imparting greater agency to political representatives. Written communication has overridden the sanctity of the spoken word. Younger, educated Nicobarese, especially men, have been privileged by the new institutional arrangements and are active participants in social change. Thus, humanitarian intervention has resulted in shifting relationships of power and equity. Moreover, the ecological consequences appear to be unsustainable. The article suggests the need for enhanced sensitivity to cultural specificities and inherent human capacity in designing humanitarian intervention.