Although HIV/AIDS prevalence in Kenya has shown a downward trend in the recent years, it continues to impact negatively on agricultural production and food security in rural areas. The declining trends in crop production remain a challenge for development efforts. This study examines the extent to which AIDS has impacted on agricultural production, incomes and food security. Using a sample of 212 households, the study examines changes in welfare of households experiencing death and illness associated with HIV/AIDS condition. Poverty incidence and severity are observed to be higher among affected and non-affected households. The higher poverty levels among the affected cohort can partly be explained by lower crop and livestock production. In the absence of formal insurance mechanisms, medical costs take precedence over crop and livestock intensification; any credit that may be available goes to cater for medicare; the few assets available are disposed for purposes of meeting health needs. There is less land under crops and more fallow among the affected households. The effects are worse for farm households in the marginal areas an indication that there may be need for special programmes for arid and semiarid areas. Given that poverty seems to reinforce the spread of the HIV/AIDS and that once AIDS strikes it becomes a driver of poverty, the study adds further support to views that intervention strategies need to deal with poverty and HIV/AIDS problems concurrently.