Marine hydrokinetic (MHK) energy offers a promising new source of renewable ocean energy. However, the young industry is faced with significant challenges. Most notable is the challenge of regulatory uncertainty that is thought to hamper the successful deployment of new tidal energy technologies. Adaptive management may be one approach to deal with uncertainty and inform permitting decisions for hydrokinetic projects. In this study, we apply the concept of adaptive management to the Cobscook Bay Tidal Energy Project in Maine to better understand and inform permitting decisions. Using a social science approach of observation, interviews, and document analysis, we examine (1) agency roles and authority, (2) agency interactions, (3) regulatory change, and (4) challenges faced in the regulatory and permitting process for MHK development at the federal and state level. We found four institutional factors favorable to an adaptive approach. These include experimentation and learning, institutionalized choice to correct avoidable error, a strong commitment to interagency coordination, and an emphasis on early proactive engagement with project developers. We also identified institutional challenges or vulnerabilities. These include conflicting agency cultures, high financial costs, and long timeframes associated with baseline data collection. Lessons learned from this study can assist regulators, policymakers, and project developers design and implement an actively adaptive management approach that can move new renewable ocean energy development forward in a way that is socially acceptable and environmentally responsible.