An adaptive governance system strives to enhance the capacity of institutions to better coordinate relief operations, public awareness and risk reduction policy in case of natural or man-made disasters, by promoting learning from experience. The contribution of this article is twofold: (1) to establish an assessment framework for the adaptive capacity of a system in the field of disasters, and (2) to explore the governance system of Mt. Merapi volcano, Indonesia. We chose the Merapi volcano in the wake of the large 2010 eruption, the largest event over the past 140 years. We develop and apply an assessment framework for the adaptive capacity of a system with the following six key parameters: (1) system description, (2) technology, (3) infrastructure, (4) institutions, (5) information and skills, and (6) economic and financial resources. The methodology consists of a qualitative analysis, using a text analysis. The data have been collected from a field survey, which was conducted after the 2010 volcanic eruption and rain-triggered lahars on Mt. Merapi in central Java. We underline a number of challenges, such as apparent lack of appropriate infrastructures, complex interactions across institutions, dependence on funds from external parties, and limited quantitative documentation on both human and material loss, which may weaken the adaptive capacity of the system. More efforts are therefore needed in order to improve the adaptive capacity and, thus, the adaptive governance at Mt. Merapi. This study represents a significant step toward enhancing our understanding of the adaptive governance approach in developing countries.