Since the last few decades, there is an increasing recognition of the contribution of forest and environmental resources to rural poverty. Using data from two rural villages in Mozambique, this study aimed to assess the contribution of forest and environmental resources to rural poverty incidence, depth and severity on the one hand, and the dependency of rural poor and non-poor households on forest and environmental resources on the other. The three variants of the FGT poverty index, with and without forest and environmental income, and the relative shares of each livelihood activities to the total income accounting of the poor and the non-poor were estimated. The results indicate that forest and environmental income was the second important livelihood activity to both poor and non-poor households next to crop production - contributing about 22.46 and 24.14 percent to the poor and non-poor sample households respectively. With regard to the contribution of forest and environmental resources to rural poverty, dramatic increase in the incidence, depth and severity of poverty were observed when forest and environmental income was excluded from sample households' total income accounting. These indicate that forest and environmental resources are crucial to the livelihood of the poor and to the reduction in the incidence, depth and severity of poverty. Therefore, any exclusion of forest and environmental resources use while assessing poverty leads to underestimation of rural income and miscalculation of rural poverty incidence, depth and severity which ultimately misguide policy interventions.