This paper presents the important findings of a study undertaken in two selected tsunami-affected coastal cities in Sri Lanka (Batticaloa and Galle) to measure the revealed and emergent vulnerability of coastal communities. International risk studies have failed to demonstrate the high vulnerability of coastal communities to tsunami in Sri Lanka. Therefore, indirect assessment tools to measure pre-event vulnerability have to be complemented by assessment tools that analyse revealed and emergent vulnerability in looking at the aftermath and impact patterns of a real scenario, as well as in examining the dynamics of disaster recovery in which different vulnerabilities can be identified. The paper first presents a conceptual framework for capturing vulnerability within a process-oriented approach linked to sustainable development. Next, it highlights selected indicators and methods to measure revealed and emergent vulnerability at the local level using the examples of Batticaloa and Galle. Finally, it discusses the usefulness and application of vulnerability indicators within the framework of reconstruction.