In 2001, two indigenous Orang Asli communities living in Peninsula Malaysia were forced to leave their homelands to make way for the Sungai Selangor dam. The dam, built to resolve water shortages in Kuala Lumpur, came with a comprehensive compensation package designed to alleviate the hardships faced by the displaced communities. This paper explores the discursive and material impacts of these compensation packages. We argue that the emerging literature on compensation for displaced people values the same sorts of economic and social criteria as the Malaysian government does in its pursuit of modernising the Orang Asli. Their shared belief that effective compensation would improve the quality of life for affected communities above pre-displacement levels helped to publicly legitimise the dam-building project. Interviews with the displaced communities, however, found stark differences in community satisfaction which have more to do with losses of intrinsic place-based cultural and spiritual values, for which there may be no effective or adequate compensation, than social and economic criteria. We conclude that compensation programmes will always struggle to effectively cope with these less tangible place-based values and that open acknowledgement of this weakness is required if alternatives to displacement-inducing development projects are to be more readily considered.