This paper draws on the literature on agroforestry, disaster risk reduction, and livelihoods of people on small islands as it applies to a community prospering in conditions of adversity in Kinali village on Siau Island, Indonesia. Siau Island produces between one-third and one-half of all nutmeg and mace exported from Indonesia. The Kinali community has adopted strategies that enable it to prosper in spite of the risks of living on a small island with an active volcano. The paper charts the sociocultural dynamics of the village and examines how local coping mechanisms based on an agroforestry economy have assisted villagers in dealing with the multiple hazards and constraints arising from the biophysical characteristics of their island. The paper thus contributes to more informed responses to managing volcanic risk.