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Income derived from forest extraction occupies a significant proportion of total household income for many forest communities in sub-Saharan African. However, there is a dearth of empirical evidence in general on the distributional implications of forest income on poverty and inequality. In addition, there is a gap in our knowledge on the factors underlying households' participation in forest extraction activities as well as income derived from forest extraction. We use data from a survey of 1457 households from nine local government areas (LGAs) in the Cross River State in south-eastern Nigeria. Results from poverty and inequality decomposition experiments suggest that forest income plays a significant role in mitigating poverty and inequality in the region with varying impacts across the LGAs. Furthermore, results from a Tobit model with sample selection on the determinants of forest income indicate that the age, education and sex of household heads, alternative household income sources, household size, membership in forest management institutions, household poverty status and distance from homestead to the forest have statistically significant impacts on both the probability to participate in forest extraction and the amount derived from forest gathering. Possibly policy implications of the findings are extensively discussed.