Based on livelihood approach and using both livelihood strategy participatory assessment and household survey data this study mainly focus on assessment of evolution of livelihood strategy and income of households in the Coastal Sandy Zone of Thua Thien Hue Province. Findings indicated that livelihood strategies are very dynamic and considerable difference between the wealth categories of households and among the study sites. Although agriculture –based strategy is one of the most popular among the livelihood strategies there are considerable changes. Thanks to more specialization on livestock - non-farm business – aquaculture the better-off category has increased rapidly their income during 2003-2008 period. By contrast, due to more dependence on food crop, wage work and migration, income of the poor slowly improved at the same period. These findings implicate that in the context of rural development, support policies introduced by government have positively influenced on household income, but these general policies cannot meet the development needs from various locations as well as different household categories because there is marked difference in livelihood assets, human source, landholding, financial and social capitals in particular.