“Rural poverty is a major problem in Tanzania that has become the focus of different development strategies. Poverty alleviation is a priority objective in the national development strategies. Inadequate and unreliable rainfall has restricted the potential of the rain-fed agriculture for rural poverty alleviation. Consequently, there has been an increasing appreciation of the role of small-scale traditional irrigation development. Ndiwa is an indigenous traditional irrigation system that is practiced on the West Usambara Mountains and it has been experiencing various changes that influence its potential for poverty alleviation. This study identifies and explains the changes in NIS and examines their implications to rural poverty alleviation. A sample of seven villages was drawn from three divisions. The findings of the study show that NIS contributes to poverty alleviation as it enables upland farmers to produce products especially vegetables during the dry season. This not only rescues farmers from unreliable rain-fed agriculture, but also generates higher incomes since farmers can grow high values crops more frequently. Ndiwa farmers are better off compared to non-ndiwa farmers in their possession of material assets such as better houses, more livestock, fields, durable household items and farm implements. These have resulted from the better income earned from using the NIS. However, various constraints threaten this positive contribution of NIS to rural poverty alleviation.”