This paper investigates the nature and causes of vulnerability to bushfires in the Wulgulmerang district of East Gippsland, Victoria, in south-eastern Australia. In 2003 bushfires devastated the small population of this isolated farming district, destroying homes, agricultural assets and public infrastructure. The fires also adversely affected the health, livelihoods and social lives of many local people. The paper examines: (i) how and why people were exposed to hazards during the bushfires; and (ii) how and why people were differentially capable of coping and adapting to the fires' impacts. Qualitative methods were primarily used to investigate these questions, including semi-structured interviews with residents and landholders of the district and others who responded to the fires in an official or unofficial capacity. Vulnerability is shown to arise from the circumstances of people's everyday lives, which are shaped by factors both within and beyond their control. Local pressures and challenges e such as drought, declining farm incomes, depopulation, and the inaccessibility of essential services e are shown to increase people's exposure to hazards and reduce their capacities to cope and adapt. The paper demonstrates the fundamental importance of sustainable livelihoods and regional economic vitality to the long-term goal of vulnerability reduction.