Extreme natural disasters, particularly those induced by hydro-meteorological factors are not only becoming more frequent, but their destructive potential is also increasing. Population explosion and global warming are enhancing their adverse effect and hence, strengthening the coping capacity to natural disasters is of particular concern to coastal communities. The Andaman and Nicobar archipelago is of particular interest in view of its rich and unique diversity of fauna, flora, ethnic tribes and their strategic location from the point of national security. In this article, it is emphasized that the past (pre-tsunami) unsustainable development activities should be stopped, and a new ‘bioisland paradigm’ of sustainable development should be ushered in. The vast marine resource base has a high potential for sustainable livelihood and economic prosperity. In the past, forestry and agriculture have been overexploited with etrimental consequences to ecology and sustainable livelihood. Disaster preparedness, mitigation and management strategies need to be integrated with sustainable development of the Andaman and Nicobar Islands in order to enhance the natural-disaster coping capacity and resilience of local communities.