This paper reports on a study with rural young people (aged 10–24 years) in Malawi and Lesotho, focusing on their opportunities to learn skills and access capital and assets to engage in income-generating activities (IGAs). Participatory group exercises and individual interviews provide many examples of how young people learn skills and start small businesses, as well as an insight into their strategic thinking about engaging in these livelihood options. Various factors, including the effects of AIDS, are shown to affect young people's prospects of succeeding in their ventures. Young people are very keen on starting IGAs, and are supported by adult members of their communities in asking for interventions to help them. We argue that expanded vocational and business training, focusing on locally appropriate types and scale of businesses, coupled with help to raise start-up capital has the potential to improve the chances of young people who are poor and/or AIDS-affected securing sustainable rural livelihoods in their futures. Since AIDS is intertwined with many other issues affecting young people's livelihoods, it is problematic to single out and target only AIDS-affected young people with interventions on skills building and IGAs. Policymakers' attitudes to vocational skills training and support for IGAs in Malawi and Lesotho are also explored, and policy recommendations made to support vulnerable rural young people in their attempts to build sustainable livelihoods.