This study assesses the contribution of Agricultural Marketing Co-operatives (AMCOS) in poverty reduction to cashew nut farmers. The study was conducted in Mtwara region, in southern Tanzania. The two Divisions of Newala District namely Newala and Kitangari were purposefully selected followed by random selection of seven wards. A cross sectional survey was conducted to collect primary data from 200 farmers, and seven Agriculture Marketing Cooperative Societies. Secondary data were collected from CBT, TANECU and Newala District Council (NDC). Descriptive and quantitative analytical techniques were employed. The findings indicate that farmers obtained an average of Tsh 276 087; 331 752 and 403 187 as income to their family for 2006/07; 2007/08 and 2008/09 respectively. This income trend was due to their involvement in the AMCOS marketing channels from three crop seasons 2006/07 – 2008/09. Results indicate that cashew nut farmers depend mainly on agricultural production as their sole source of income and wellbeing. Farmer’s gross margin analysis indicates a gross margin of Tsh 24 947 per 80 kg bag of raw cashew nut. Socio-economic factors which were found to influence cashew nut farmers’ participation in the AMCOS market channel were: age of the household head, education level of the household head, household size, gender of the household head, marital status of the household head, price information and distance from the AMCOS godown. Age of the farmer, size of the farm and gender were statistically significant influence (P < 0.05). As the farm size increases farmers opt for engaging in AMCOS market as a reliable market channel. Thus, the study recommends that farmers have to be trained on the importance of using the AMCOS marketing channel in order to ensure safe and reliable market for their produce.