Poverty is a serious challenge in Kenya, with more than-half of the population being poor. Kenya has today among the highest rates of poverty in Africa, with significantly higher poverty incidences reported in rural than urban areas. About 35 percent and 8 percent of the urban population live in extreme poverty and cannot meet their basic food needs. Rural livelihoods largely depend on productive resources including land, human, physical and financial capital and these resources largely determine the poverty dynamics in these areas. The study aims at investigating the interplay between livelihood assets and poverty dynamics and to understand the critical issues that seem to drive poverty among rural households in Kenya.