The study analyzed income inequality and poverty dynamics among rural farm households in Abia State, Nigeria. Beyond the broad objective, the study sought specifically to estimate the income distribution and determine the poverty line, gap and incidence of the rural farm households. A total of 240 households were selected across the agricultural zones using multistage sampling technique from which data and information were elicited. Data collection was between 2010 and 2011. Analytically, the study employed Gini coefficient in the estimation of income distribution while poverty indicators (Mean household income, headcount ratio and poverty gap index) were used to measure poverty line, poverty incidence and gap. Income distribution showed high level of inequality (Gini index = 0.987) with per capita income falling below the operational national minimum wage. The poverty gap and incidence gave a scary picture of worsening poverty situation, judging from the poverty indicators (head count index = 0.567; poverty gap = 0.568). To reverse the trend, it is important that concerted efforts are made by way of policy direction to ensure that the rural economy which is largely agrarian is improved. This can be achieved by adopting input subsidy, private sector driven market access policy, labour intensive techniques in execution of public projects among others