Cascading Tank Village Systems (CTVSs) of Sri Lanka historically provided a resilient community-based social-ecological water management system in the rural dryzone of Sri Lanka [1]. The CTVS has been described as the ‘lifeblood’ of communities in the rural dry zone [2] and as a globally important Agricultural Heritage System by the FAO [3]. After being abandoned for many centuries, their restoration is now being pursued by different national and international actors as a key to climate change mitigation and sustainable livelihoods for communities [4]. Rural livelihoods in the dry zone are at risk due to multiple factors, poor access and management of water, economic and health pressures, as well as resource limitations and degradation [5]. Despite recent efforts to restore CTVS systems, no social-ecological approach (SES) nor sustainable livelihoods framework (SLF) focused approach to ensuring resilient and sustainable livelihood outcomes has been taken [6]. As part of an on-going PhD project, this paper describes the background, current challenges and potential for an SES focused resilience thinking approach to CTVS combined with a focus on sustainable livelihoods for future sustainable livelihood opportunities and outcomes. The study finds current restoration efforts are at a crossroads between restoring the past (system adaptability) or transforming for the future. It introduces relevant SES and resilience thinking concepts and analyses the CTVS from this perspective. A particular contribution of this study is to point to the significant overlaps and complementarities in social-ecological (SES) resilience thinking and SLF approaches to analysis and proposals for resilient rural development. Employing resilience thinking principles it recommends strategies to create positive livelihood outcomes for communities and households. Keywords: cascading tank village system; sustainable livelihoods; resilience thinking; Sri Lanka; rural dry zone; community rural development