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Local governments around the world face mounting pressures that affect their provision of public services. To prepare for and respond to stressors and shocks, local service providers can choose from among a wide variety of actions. The adaptive actions they choose will influence which risks are addressed, when, and how. Selection of adaptive actions can also have long-term implications, if actions affect future options for adaptation. This research investigates the influence of institutions on selection of adaptive actions by local public service providers as they seek to respond to climatic stressors. Drawing on insights from focus groups with local drinking water utilities across the USA, the research identifies five institutional dependencies that affect the selection of adaptive actions and examines the pathways through which those institutional dependencies influence decision-making. These pathways are then combined to present a conceptual model of factors shaping selection of adaptive actions. Findings indicate that the polycentric institutional environment in which local service providers are embedded limits control over adaptation decisions, can constrain the set of feasible actions, and can add substantial transaction costs. As a result, selection of adaptive actions includes consideration of the effect of institutional dependencies on the feasibility and ease of implementation.