The concern over sustainable livelihoods in African drylands is an issue that has received considerable attention from researchers and policy makers alike. Over the past two decades African rural areas have undergone rapid changes, whereby, rural income diversification has become the most salient feature. With a particular focus on dryland ecosystems, among the major challenges facing communities in these areas is recurrent drought leading to conditions of food insecurity. This paper draws on experience on coping mechanisms for food insecurity from an agro-pastoral community in Mvumi, located in the semiarid areas of central Tanzania. An understanding of livelihoods of people in this area has involved examining how communities have managed to adjust their livelihood in the midst of challenges resulting not only from drought but also from various forces such as socio–economic, political and ecological factors. It has been found out that, despite profound food crisis in this area, people are not always desperate and that there are possibilities for realizing some hidden potentials of dryland resources for livelihood diversification. The issue of sustainable natural resource management in such areas is, however, questionable because of some adverse environmental effects associated with some of the coping mechanisms.