The Institutions of Sustainability (IoS) framework is a coherent framework that takes into account the interdependencies between ecological and social systems. It has been applied in previous studies and proven to be a useful tool for the analysis of issues in agricultural economics and resource management centred on human–nature interaction. However, previous contributions have not made explicit how to create the link between the analytical framework and practical empirical research, i.e. how to operationalize the IoS framework, how to ‘unpack’ action arenas and how to derive a step by step analysis of the institutional arrangements. This paper explains the application of this framework using the example of agricultural soil degradation and soil conservation policy. It draws on experience from 10 case studies across Europe where the common framework and methods were applied. I discuss several challenges that occurred when the framework was utilized to guide case study research. The paper aims to assist scholars from different disciplines in the application of the IoS framework to undertake a systematic institutional analysis. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.