It is now almost universally accepted that most of the nearshore fisheries in Southeast Asia are overfished. It is also accepted that overcapacity is one of the leading causes of this overfishing. The problem of addressing overcapacity in small-scale fisheries in Southeast Asia is much more complex than that of reducing overcapacity in industrial fleets. In order to manage capacity, managers need to measure and understand how much capacity currently exists in the fishery and what is the desirable level of capacity that best meets the set of management objectives. The only feasible solution to overcapacity may be based on a coordinated and integrated approach involving a mixed strategy of resource management, resource restoration and conservation, livelihoods and economic and community development, and restructured governance arrangements. The reduction of overcapacity implies an increased focus on people-related solutions and on communities.