Between August and October 2004, a study of household poverty dynamics was undertaken in forty rural communities in two regions of the Andean highlands of Peru to ascertain how different households have fared over time. This study took the same community-based ‘Stages-of-Progress’ approach designed for studying poverty dynamics and the role of livestock as did several similar studies conducted earlier in different parts of India, Uganda and Kenya. The main objectives of this study, as with the others, were to determine how rural households in Peru define poverty, to describe the poverty dynamics, or households’ movements into and out of poverty over two different time periods, and explore the reasons for these movements. With the earlier studies demonstrating the import and complex role that livestock play for poor households, a particular focus of this study was to delve into the role of livestock in poverty dynamics as deeply as possible. A secondary objective was to be able to draw policy and other lessons from the similarities and differences found in applying the same methodology across the 3 very different continents. This paper covers the main objectives only; a synthesis paper covering the second objective is in process.