["Environmental Policy and Governance, EarlyView. ", "\nABSTRACT\nIn many cases, addressing climate risks requires transformative climate adaptation (TCA) that goes beyond small adjustments to existing systems. While scholars increasingly argue that participatory governance is key and should embrace conflict rather than push for consensus to enable TCA, this assumption remains underexplored. Therefore, this study investigates how participatory governance deals with conflict to enable TCA, drawing on a historical analysis of the Dutch Hegewarren case—a co‐creation process that led to the decision to transform an agricultural polder into a natural peatland. We find that conflict serves TCA indirectly. By allowing for conflict and taking political alternatives seriously, the co‐creation process created the enabling conditions for TCA. Specifically, allowing disagreement within the process improved participants' perceptions of the legitimacy of the co‐creation process and its outcomes. Simultaneously, the co‐creation process reshaped the social and cognitive context, reducing distrust and reframing conflicts as participants' perspectives evolved through sustained interaction. Finally, our analysis highlights the unpredictable nature of transformative change. We consider this the “magic” of conflict: moments when new combinations of problems and solutions spark contestation, yet simultaneously generate the energy needed for continuous improvement in later phases and open opportunities for policy change. By illuminating how participatory governance can productively engage with conflict, this research contributes to a better understanding of the conditions under which TCA becomes possible.\n"]