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There is much controversy surrounding the poverty-environmental degradation nexus. The predominant school of thought argues that poverty is a major cause of environmental degradation and if policy makers want to address environmental issues, then they must first address the poverty problem. Another school of thought argues that a direct link between poverty and environmental degradation is too simplistic and the nexus is governed by a complex web of factors. In this paper, a formal structure for analyzing the complex web of factors is formulated and used to review the existing literature on the links between poverty and the degradation of four natural resource sectors. The analysis highlights the important role institutional and market failure in encouraging agents from various income groups to exhibit unsustainable activities which in turn forces some of the agents to fall into poverty. Another important factor is the role of conflicts between different agents (income groups) in the povertyenvironmental degradation nexus. The analysis also highlights the presence of feedback loops between environmental degradation and poverty.