The hydropower system in Vietnam has been crowdedly built on river basins in the country. Because it offers economic benefits and energy for industrial growth, the social and environmental impacts of hydropower are of great interest to scientists, governments and other stakeholders. This paper analyses its impacts on affected people in both resettled upstream communities and on downstream areas. Findings show that inadequate compensation and poor resettlement policy as well as an absence of post-resettlement policies thrust unfortunate circumstances on people resettled to upstream sites, such as loss of accessibility to natural forests and land resources, and loss of livelihood activities. Resettled communities upstream are often pushed into poverty, and experience unemployment, gender inequity and major cultural shocks. Also indicated are the negative impacts of hydropower development on downstream areas. Water storage in reservoirs during the dry season causes water shortage for cultivation and daily activities in downstream areas. Conversely, sudden water discharges with little warning also cause serious flooding and inundation in downstream sites. As a result, both in the dry and flooding seasons, cultivation and other livelihood activities of the local people are interrupted, and they face increased costs, and losses and damage to housing, etc. Gaps in water law and compensation policies were identified, which were the cause of the negative social impacts of hydropower projects. Trade-offs of hydropower development included unsustainable and inequitable development. Findings draw attention to the urgent need for stakeholders to correct hydropower development strategies in Vietnam.