Although Vietnam is now the second biggest rice-exporting country in the world, food shortages subsist in some areas where substantial part of the population is poor and highly dependant on natural resources. In the northern mountainous provinces of Vietnam, population growth, degradation and erosion of land are threatening the sustainable development and food security of agricultural households. The mountain rural communities in northern of Viet Nam are among the poorest in the nation, and have benefited the least from the recent economic growth. The Yen Bai province, in the north western part of Vietnam is a typical example. After agricultural de-collectivization, farmers have shifted from irrigated rice in the lowlands combined with upland rice under slash and burn cultivation to more diversified farming systems combining perennial and annual crops. The objectives of our research were to get a good understanding of farmers' socio-economic conditions and livelihood strategies, and to identify the potential links between poverty, agricultural practices and access to water. We concentrated our activities on the two communes of Nam Bung and Suoi Giang, Van Chan district (Yen Bai), that were contrasted in terms of market access and watershed configurations. Two farm surveys were conducted in July 2006 and April 2007 to generate the data. Each time, 120 households in the two communes of Nam Bung and Suoi Giang in Van Chan District were randomly selected. This accounts for about 30% of the total households in each village. Using cluster analysis, we first developed a typology of farmers in those two communes. We then fit a Cobb - Douglass function of incomes to identify the factors that influenced most households' income. Finally, we discussed specific research needs for each group. In each communes four farmers' types were identified. Not surprisingly access to water was also found to be an important factor of discrimination between households. However, some other livelihood strategies are creating strong differences between groups: off-farm activities and permanent crop cultivation are also two important strategies used. We also found that:: - Land and water is not evenly distributed among households of the village. The four categories of households that were extracted show very diverse land endowment and access to water. This difference in initial endowment induces different adapted strategies responding to the different incentives: terraces construction for labor rich households, intensification in the lowland for lowland-rich households. - One group, tagged "poor households", seemed to be without real solutions at that stage: cash constraints prevent investment in the lowland when they have access to this compartment, labor constraints prevent high transition to terracing in the sloping area. They are somehow "trapped into poverty". Low external inputs food crops under rainfed conditions should be developed with these households; - Hence, intensification of rice production in the lower part of the watershed is also a problem of water distribution. Many farmers do not grow rice during that season simply because their plots do not receive water during that season. Some farmers having plots receiving water during spring season do not have enough labor to use all the potential of their land during that cycle. New water allocation rules may be able to provide a better distribution of water and hence wealth among households. - Farmers with low access to water, and important labor force, are trying to increase their irrigated area by construction terraces in the sloping zone. This is still a new and limited phenomenon, but appears in the households in high demand for food and no possibilities to expand their paddy area; we anticipate that this will be expanding with the increasing demand for food. - Access to water has a greater impact on farm revenues in the commune of Nam Bung than in the Suoi Giang commune. Our interpretation is