This paper attempted to analyze and understand the management of capital allocation for sustainable municipal solid waste management system at Bang Saen, Thailand. Financial, manufactured, human, social and natural capital was the focus of this study. Capital allocation to five capitals, activities of the stakeholders related to municipal solid waste management, and the output of these activities were analyzed. The investigation was carried out by reviewing documents, conducting in-depth interviews with various stakeholders including the Saensuk municipality officials, locals and tourists, and carrying out field observations. Results showed that total output from five capitals is influenced by activity performance of stakeholders, which is dependent on input to five capitals. However, input was made without assessments of output produced by the activities of the stakeholders, which stemmed from the absence of a policy goal on municipal solid waste management and action plans to achieve its goal. Capital was mostly allocated to financial and manufactured capitals in terms of support of municipal solid waste collection, transportation and disposal. Findings suggest that capital should be allocated to activities related to human, social and natural capitals that can help improve activity performance of the stakeholders, and therefore improve total output and sustainability of the system. Well-designed activities could generate improved output, which is made by readjusting input based on assessments of output and by reflecting feedback in decision making on capital allocation. For this reason, the municipality has to set a clear policy goal of municipal solid waste management, short-term, and long-term action plans. Finally, recommendation is given to municipality.