This paper discusses benefits that informal wetland communities in Kampala, Uganda derive from their location in the wetland and how they adapt to minimize vulnerability to hazards such as floods and disease vectors. We focus on the mechanisms, preferences and ability to adapt. A total of 551 households were interviewed in addition to four focus group discussions and five key informant interviews. Free water from spring wells and cheaper rental units topped the benefits from location, while the main benefit associated with the wetland is that it supports crop farming. Tenure status was significantly associated with the preference and perceived ability to adapt: tenants were less likely to prefer to adapt, and less likely to perceive themselves as able to afford adaptation, than landlords. There is a need for coordinated adaptation strategies that involve all stakeholders and that enhance equitable utilization of wetland resources without compromising their ecosystem services and economic benefits.