Recent quantitative studies on Ethiopia’s rural households’ poverty of the last decade indicated that poverty head count has reduced. Nevertheless, most qualitative studies witnessed the contrary to quantitative studies. This study assesses how the Ethiopian rural households perceive poverty using self reported data from the Ethiopian Rural Household Survey (ERHS). Moreover, it has examined whether poverty is actually reducing as claimed by official government reports. Our findings come up with mixed results. Majority of the respondents reported that health care, family housing, and credits have been improving compared to the last decade. Nevertheless, perceptions related to food consumption and comparisons of wealth rankings relative to their fathers’ tend to show that the situation is worse though the sample size may not be sufficient to generalize about the whole country.