Increasing population density on the main islands of both Tuvalu and Kiribati is generating waste loadings that exceed the assimilative capacity of the natural systems. The resulting pollution is lowering the quality of life and causing ill health. The renewable resources of the atolls are being degraded and their ability to provide a continuous stream of future benefits is in jeopardy. Development proposals pose additional environmental threats. This article (based on fieldwork conducted in Kiribati and Tuvalu in September 1995) examines the management of natural resources on these two Pacific atolls, and some of the institutional and financial implications of addressing the consequential development imperatives.