Although most of the total population and the majority of the people living in poverty in Latin America and the Caribbean are in urban centres, poverty is, in relative terms, still a rural phenomenon in the region. The incidence of poverty and of extreme poverty is much larger in rural areas than in urban settings. As recently as 1997, more than half of all rural households were living in poverty, and close to a third of them were in extreme poverty conditions. Moreover, the fragile economic situation of most countries in the region during the past two years may well have worsened those figures. The rural poor in the region face at least three basic challenges: (i); inadequate nutrition and poor health and educational services; (ii); few opportunities for productive employment in agricultural and/or non-farm activities; and (iii); lack of sufficient levels of organization to lobby effectively for rural interests. The number and diversity of circumstances that cause rural poverty, as well as the heterogeneity of rural poverty conditions across and within countries and regions, constitutes a challenge to develop cost-effective solutions to improve the well-being of rural inhabitants. The objective of this article is to highlight several options for the reduction of rural poverty in the region. It therefore focuses on three important and complementary options for generating and raising income levels among the rural poor: those based on growth in the agricultural sector, those targeting the sustainable use and conservation of natural resources; and those based on the growing significance of rural off-farm economic activities. There are at least two other options for reducing rural poverty: the traditional migration to urban areas, and targeted assistance to those who need income transfers to either rise above the poverty line and/or have minimum access to safety nets.