Many observers have conceptualised the link between rural poverty and environment as a ‘downward spiral’ with population growth and economic marginalisation leading to environmental degradation. Recent micro-scale empirical research challenges this model, showing striking heterogeneity in environmental management by the rural poor, their success in adapting to environmental change and the efficacy of policies in influencing outcomes. Local endowments, conditions affecting the adoption of resource-conserving technologies and local institutions supportive of the poor are key factors that condition poverty–environment interactions and outcomes in relation to agriculture. The main strategies to jointly address poverty and environmental improvement are to increase poor people’s access to natural resources, enhance the productivity of poor people’s natural resource assets and involve local people in resolving public natural resource management concerns. Research is needed to support these strategies, particularly to explore poverty–environment–agriculture interactions, develop technologies for poor farmers and partner with local communities for action research on policies and programmes.