Since the transition from socialism in 1992, Mongolia has made significant economic progress. Although, economy performed well, the percentage of population living under the national poverty line has been relatively constant in the last 30 years of transformation. According to the latest data, the poverty rate remained high at 28.4%. Mongolia aims to reduce poverty by half by 2030 under its long-term development policy, Vision 2050. Poverty remains very high in rural areas (30.5%) than in urban areas (26.5%). There is a relative importance of different income sources for Mongolian households by different geographical areas. Across all different groups, labour income (wage, business or agricultural income) represents about 70% of people’s income, but though there are significant geographical differences in its composition of labour income, with wage income being more important in urban areas and agricultural income being the largest source in rural areas. Distance from markets, lack of infrastructure, limited opportunities to access education, healthcare and information, and resulting unavailability of jobs have a negative in rural living standards. Direct dependence of economic and livelihood activities on natural and weather conditions is a major challenge for rural development (Government of Mongolia and UNDP (2007). Millennium Development Goal Implementation Report II). This chapter will aim to understand the challenges and issues faced by the rural population of Mongolia. Mainly secondary data analysis will be carried out using Population and Housing Census and surveys of Household Socio-Economic Survey and the Labour Force Survey. The main contents are: (i) current rural socio-economic situation of rural development in Mongolia, (ii) an analysis on poverty profile and living standards by geographical areas, (iii) challenges faced and resilience against them and (iv) summary conclusions and recommendations.