International organizations commonly promote climate change adaptation through mainstreaming, that is, top-down processes aimed at national and subnational/territorial capacity building. This case study integrates institutional adaptive capacity into the policy capacity framework to deliver a clearer and comprehensive multi-level analysis of the characteristics that affect policy capacity for making mainstreaming work. Perspectives from bureaucrats and territorial stakeholders in the case of Chile suggest three principal challenges: institutionalizing a robust interpretation of sustainability, implementing a bottom-up approach to centralized vertical coordination, and enhancing collective decision-making within territorial multi-actor committees.