The situation of low income in Kigoma District is persistent in spite of some people being members of income generating group s (IGGs). There is limited empirical information on the performance of IGGs. This leads to mixed views with regard to performance of IGGs. The main objective of this study was to determine the contribution of IGGs to the reduction of household income poverty in Kigoma District. The specific objectives of the study were to identify Income-Generating Activities (IGAs) done by households which were in IGGs and those which were not; record monetary values of products produced and services provided by households which were in IGGs and those which were not in 2009/10; and determine impacts of acreage per capita, monetary value of credit per capita, costs of production and service provision per capita, and gross monetary value per capita of products produced and services provided on Net Household Product (NHP) per capita. This study used data collected from a sample of 128 households from November 2010 to January 2011. Both purposive and simple random sampling techniques were used. Data were analysed by using the Statistical Package for Social Sciences (SPSS). Independent samples t-test and multiple linear regression models were employed. The results showed that the mean NHP per capita among households which were in IGGs and among households which were not were Tsh. 115 698 and Tsh. 112 991, respectively. The difference in the NHPs was not significant (p = 0.910). The mean NHP per capita in MHHs and FHHs were Tshs. 137 154 and Tsh. 73 684 respectively and significantly different (p = 0.010) at the 1% level of significance. The results also indicated that gross monetary value of products produced and services provided was the variable which had the biggest and most significant impact (β =1.473, p = 0.000) on NHP per capita. Based on the findings it is concluded that the higher the gross monetary value of products produced and services provided by the household, the higher the net household product per capita. It is also concluded that membership in IGGs has positive impact on NHP per capita and thus contributes to income poverty reduction. Therefore, it is recommended that development facilitators at different levels should build capacities of IGGs and strengthen supervision and monitoring of IGAs done by people in IGGs so that the IGGs may contribute more to poverty alleviation.