Jharkhand state is carved out from Bihar state in 2000. The state is rich in mineral resources and poor in agricultural production. More than 75% of work force is engaged in agriculture, but generates only 20% of state’s GDP. About 45% area is under nonagricultural use and 32% is culturable wastes which are unsuitable for agricultural production and only 23% area is under cultivation. Despite the abundance of industrial production, rural population has not benefited and majority are earning their livelihoods through agriculture. During last ten years agriculture could not grow in the state as per expectations, resulting higher rural poverty. The incidence of poverty in Jharkhand is estimated at 46%; however 60% of schedule caste and schedule tribes are still below poverty line. Hence, it may be said that agro-ecological and social factors are main causes for poverty in Jharkhand state. The present study has been envisaged to analyze the agroecological and social factors causing poverty in the state. This study is based on data obtained from160 rural households through panel interview under the project entitled ―Tracking change in rural poverty in villages and household economies of South Asia. Analysis of data reveals that size of land holding is comparatively higher (0.56 ha) than neighboring states, but only 66% of land area owned by farmers is under cultivation in sample villages, indicating abundance of culturable waste land. Livestock is the second important economic activity on sample households, but the productivity is much low due to domestication of local breeds of animals. The distribution of land and livestock ownership is more equitable in Ranchi than Dumka district. It was observed that lack of employment opportunity might have caused the poverty in the state because only onethird population is engaged in economic activity.