Sri Lanka's development experience has been a story of mixed success. The country has made impressive gains in human development that are comparable to those achieved by middle-income countries. Furthermore, in some areas - like universal primary school enrollment, gender parity in primary and secondary school enrollment, and universal provision of reproductive health services - Sri Lanka is set to meet the Millennium Development Goals (MDGs) well before 2015. At the same time, significant challenges remain in reducing consumption/income poverty, as well as on some key non-income dimensions of welfare, such as malnutrition. This report will look into the range of factors that are responsible for the uneven geographic distribution of growth and poverty, and contribute to the challenges in reducing poverty in Sri Lanka at both regional and household level. And beyond these crosscutting issues, there are special combinations of factors that conspire to create poverty traps among groups who, because of historical reasons or recent events, are isolated from much of the development in Sri Lanka, such as in the estate sector and the conflict affected North and East. The analysis will show that a number of interrelated factors constrain the poor from accessing opportunities offered by more dynamic sectors of the economy. These indicate the multifaceted nature of challenges the poor face, which necessitate policy interventions along multiple dimensions.