The Electronic Journal on Information Systems in Developing Countries http://www.ejisdc.orgThis study examined the contribution of mobile phones to rural livelihoods and poverty reduction in Morogoro region, Tanzania. The study sample comprised of 310 households, 74 focus group participants and 22 key informants. Data were collected through questionnaire, focus groups, and key informant interviews and were analyzed using SPSS and Nvivo. The findings indicate that mobile phones contribute to reduce poverty and improve rural livelihoods by expanding and strengthening social networks; increase people’s ability to deal with emergencies; cut down travel costs; maximize the outcomes of necessary journeys; increase temporal accessibility; and amplify efficiency of activities. The use of mobile phones also reduces costs of doing business and increases productivity by helping rural traders and farmers to secure better markets and prices; and promptly communicate business-related information. Although they enabled rural communities to generate some income through the sale of mobile phone services, the phones had not made important contribution in this aspect. It is concluded that mobile phones contribute to improve rural livelihoods and reduce poverty by providing rural households with fast and easy modes of communication, thereby increasing their ability to access livelihood assets, undertake diverse livelihoods strategies, and overcome their vulnerabilities.