The emergence of urban canals is intertwined with the history of cities built on coastal wetlands such as Ho Chi Minh City, Vietnam’s largest metropolis. Constructed in the nineteenth century, the canals were used for water supply, flood control, and connection to the Mekong Delta. After Vietnam’s reunification, the canal network was transferred to public ownership and deteriorated due to natural and socioeconomic factors, including flood sediment deposition and maintenance neglect. The market reforms intensified rural-urban migration, which led to the emergence of infamous canal slum areas along the canals. The recent Nhieu Loc-Thi Nghe canal pilot restoration project, jointly funded by the city government and the World Bank, has been the only successfully completed water project in the city. The multidimensional biophysical-ecological and socioeconomic system of the Ho Chi Minh City canals represents a classic multi-scale problem characterized by diverse actors, multiple stressors, and multiple time scales. The multi-scale interactions among the system components, such as government policies, urban migration, climate change, and water contamination, are incorporated into the converging resilience-vulnerability frameworks. The reasons for restricted progress in the canal restoration lie in the interaction between poor governance, a remnant of the command economy; and intensified urbanization process, a sign of market reforms resulting in the growth of slum areas along the city canals. The study concludes that the way to reinstate the system’s resilience is efficient management through a combination of sufficient investment in restoration projects and solid institutional governance.