Poverty is multi-faceted issue and deep-rooted in Ethiopia. The country is among the world'srnpoorest nations in terms of human development index. The incidence of poverty in urbanrncenter of Ethiopia has been growing fast over the last few years as compared to the ruralrnarea. The main emphasis of this study is to assess the level and status of urban poverty andrnsurvival strategies of poor households in Asella town. Asella is the capital city of Arsi zone inrnOromiya regional state.rnIn this study, analysis was made using primary dala collecled Fom 300 sample householdsrnselected through systematic random sampling Fom purposively selected six Kebeles of therntown. Structured questionnaire was used to collect pertinent data form the household,.rnDescriptive statistics and statistical analysis (ch -square test) was used to describe the samplernhouseholds' demographic and socio-economic characteristics; and to test statisticalrnsignificance benveen poor and non-poor household for some calegorical variables. Inrnaddition to the statislical tests a Logit model was employed 10 identifY determinants of urbanrnpoverty. COSI of basic need (CBN) approach and poverty indices compulalional formularnwere also used to identifY the magnitude, incidence, and depth of poverty in the town.rnThe researchfolll1d out that food poverty line and total poverty line for the area are 1506.28rnBirr and 2271.86 Birr per adult per year, respectively. Both the food and the total povertyrnline for the area are higher than the national poverty line calculated for all urban areas inrnthe country. The incidence, depth and severity of urban poverty calc lila led for the areas arern69%, 33%, and 18% respectively while for the food poverty line are 63%, 27% and 15%,rnrespectively. In the study, Variables that are positively correlated Wilh the probability ofrnbeing poor are: sex, size of household and chronic diseases incidence in Ihe householdrnmember. Variable negatively correlated with probabilities of being poor are income,rneducational level, marital status and hOl/sing lenure. The Logit result shows that Fomrndifferent factors hypothesized to determine poverty variables like; sex, f amily size, monthlyrnincome, educational level of household head, and chronic diseases incidence in thernhousehold member significantly affect the incidence of poverty in the town. The result alsornhas implication for policy makers, researchers, policy implementers and non-governmentalrnagencies to take their parts in minimizing the incidence of poverty.rnThe majority of poor household heads' monthly expenditure by far exceeds their monthlyrnincome. To close the gap between their fixed incomes and ever rising expenditure of basicrnneeds, poor households in the town practice various survival and orl coping mechanismsrnwhich include: engagement of family members in various informal activities, selling ofrnpersonal possessions, selling of household assets, renting oul property, leasing part of theirrndwellings to others, moving from higher rent residential to cheaper residential areas, takingrnloans from friends orland relatives, sending children abroad, reducing the quality andrnquantity offood consumed, and reducing number of meals il1lake per day.