Critical global political ecology and critical cultural political economy approaches are used in a study involving decades of research to evaluate the changing relationship between fisher livelihoods, seashore tourism, and urban industrial development in an economically dynamic region of coastal Brazil. As the metropolitan area of Rio de Janeiro expanded and encompassed fishing communities, socio‐environmental transformations created threats to fisher ways of life, opened new multi‐functional opportunities, and also introduced unrelated juxtaposed activities. As stocks fell due to overfishing and urban industrial pollution over the last two decades, small‐scale inshore fishing declined in the bay–lagoon systems located to the east and south‐west of Rio de Janeiro. Tourism increased but proved to be a poor substitute for declining fishing activities because it and other new multi‐functional activities rarely aggregated significant value to local livelihoods. Consequently, only a small minority of fishers benefited and remained on the islands and sand spits, while the great majority left for the mainland. New cultural and environmental functions were also absent, so that of the types of multi‐functionality identified by Wilson and Holmes, those present in the study area are weak and basically serve outside urban production and consumption interests.