A growing body of literature on the commons has provided fascinating and intricate insights on how some local institutions have successfully managed to avoid a seemingly inevitable “tragedy of the commons” once popularized by Garrett Hardin. Primarily benefitting from the recent studies on the commonpool resources conducted by Elinor Ostrom and colleagues, polycentric selforganization and autonomy, rather than the direct state or market control over the commons, are often recognized as key features of the long enduring commons. However, these commons are quite diverse and the outcomes are often multiple and complex, accentuating the needs to differentiate among multiple commons outcomes. Furthermore, relatively under-reported are the cases where the degradation of common-pool resources are actually halted, and even restored. This study examines both the turbulent history of fishery mismanagement in Rupa Lake, Nepal and its reversal built around the participation, engagement and inclusiveness in the governance of its watershed. We find that Rupa Lake’s experience tells two stories. Reflecting Hardin’s dire forecast, the Rupa Lake watershed verged on collapse as population grew and seemingly selfish behavior intensified under an open-access regime. But the users also found a way to rebound and reverse their course as they adopted a bottom-up approach to fishery management and established an innovative community institution, the ‘Rupa Lake Rehabilitation and Fishery Cooperative’, dedicated to the sustainable governance of the commons. This case highlights how one community at the threshold of ‘tragedy’ transformed itself by turning conflict into collaboration, which we hope contributes to the effort of better understanding multiple commons.