The developments in the dryland region reflect the pervasiveness of poverty, which is demonstrated by the growing constraints of water, land degradation, continuing concerns about malnutrition, migration due to frequent droughts, lack of infrastructure, poor dissemination of improved technologies, and effects of government policies and further economic liberalization on the competitiveness of dryland crops. This research bulletin reviews past trends, summarizes the major constraints to income growth, food security, poverty alleviation, and environmental sustainability, and identifies future strategies and priorities. The discussion uses the semi-arid tropics as a focal point where poverty, food insecurity, child malnutrition and gender inequalities are widespread. A synthesis of evidence and lessons learned from ICRISAT Village Level Studies (VLS), conducted since 1975, is presented to provide empirical evidence on the vulnerability of the poor to various risks and shocks, as well as their capacity to access physical, financial and social resources and networks in the risky environments of the drylands. An analysis of available evidences provided a basis for identifying major policy issues that need to be addressed. Priority development interventions are identified to accelerate the pace of development of dryland agriculture: a) water as a catalyst for development; b) reorientation of public policies and better targeting of development interventions to dryland farmers, especially since they relate to key factors constraining agricultural productivity, and hence poverty reduction; c) diversification with a higher focus on crop-livestock development; d) innovative, cost effective and community based management of wastelands and common property resources; e) marketing, commercial orientation and competitiveness of dryland agriculture; and f)institutional innovations, building partnerships, linkages and capacity. The development of dryland agriculture requires synergy among technologies, marketing systems, input supplies, credit, policies and institutions. A broadbased sustainable growth and development in the drylands of Asia and sub-Saharan Africa is viewed as a key strategy for addressing rural poverty in the Asian and sub-Saharan region.