The financial mechanisms for medium and long-term adaptation measures are the outstanding issues that are expected to be further negotiated at the second session of the Sixth Conference of the Parties (COP-6) of United Nations Framework Convention on Climate Change (UNFCCC) in July 2001. It seems more likely that some form of medium and long-term financial provisions would follow in the near future. However, the issues such as, expected huge adaptation demand, unclear definition of particularly vulnerable countries, limited resources availability, and reluctance of the donors to shoulder the uncertain financial burden are required to be resolved. Some priority adaptation areas are needed to identify and the criteria for the selection of adaptation projects are required to formulate for initial phase of the funding consideration. This paper discusses and analyses the ongoing issues and controversies in relation to the adaptation funding and outlines few criteria and program priorities that could be useful to the international effort of instituting the funding for the adaptation measures.