The densely populated and persistently active volcano of Semeru in East Java, Indonesia, hosts communities able to adjust to, compensate for, and tolerate continuous exposure to persistent volcanic threats. The goal of this research is to understand how, so that the knowledge can contribute to preparedness and support emergency management. We use surveys at the village scale and statistical analyses to explore the socioeconomic characteristics of communities. We aimed to appraise how dense, rural/urban populations around a continuously active volcano can compensate for daily hardships and limited access to resources, which prevent post-eruption recovery. We found that sustainable, rural livelihood providing food and small-income jobs, diversified resources from ecological belts, new alternatives and temporary work migrations all compensate, while recurrent experiences on hazardous events may harness social adaptive capacity. What renders the majority of villagers around Semeru resilient to chronic threats lies in solidarity networks, cultural beliefs, trust in early warning and access to vital resources in case of crisis. Conservative, top-down risk management policies in Indonesia combined with obstacles that limit the adaptive capacity of communities results in disaster preparedness prior to large eruptions being too slow, with the subsequent management likely to be inefficient. The conservative risk management policy likely suffices during periods of mild activity, but it may lead to future disasters in case of large eruptions or destructive lahars. The case study of population adaptive capacity thus provides a frame of reference for other disaster-prone countries.