The central role of forests in rural livelihoods, especially for the poor and the marginalized, suggests that when exploited to full potential these resources could facilitate rural poverty alleviation. However, this is constrained by the factors that characterize the poor, including low levels of education, low levels of asset holding, poor health, lack of power and opportunities to be heard, weak local institutions and unfavourable institutional frameworks. In some areas, forests have lifted rural people out of poverty by enabling significant income generation, mobilization of savings, capital accumulation, and asset-building. This chapter highlights promising opportunities for forest-based poverty alleviation, and the prerequisites for their exploitation. Much of the evidence suggests that sustained welfare gains for the great majority of forest dependent people will require broader macro-level investments beyond forests and natural resources. Multi-scale, integrated and holistic development approaches will be needed to achieve poverty alleviation at the scale of the Millennium Development Goals.