Natural hazards not only cause direct losses of household income and assets but also affect the choice and outcome of livelihood strategies. Based on the questionnaire survey from 2007 on Mw 6.1 Ning'er earthquake-hit areas in Southwest China, we analyzed the relationship between livelihood assets (or capitals) and livelihood strategies of local rural households and identified the main factors influencing the choice of livelihood strategy. The results indicate that statistically significant differences exist in livelihood assets among livelihood strategies. The choice of livelihood strategies is affected significantly by the status of livelihood assets. High financial capitals enable households to engage in higher-returns or capital-intensive livelihood activities. Improving vocational education and skills training for rural residents, especially for the youth, is also important in developing new livelihood strategies beyond their traditional lifestyle. Higher social capitals provide households the opportunity to select a higher return and income livelihood strategy. In addition, as part of efforts to enhance physical capitals, housing construction planning and technical guidance are of critical importance to improve the anti-seismic performance of rural buildings and decrease their livelihood risk in earthquake-prone areas. It is important for farmers to improve and diversify their livelihood strategies according to regional geographical environment and the comparative advantages of their own livelihood assets.Sustainability 2019, 11, 5905 2 of 18 livelihood assets, natural disasters and livelihood strategies [8][9][10], the work on quantitatively studying their internal connections is still very scarce [11,12].China is a country affected by some of the most serious natural disasters in the world. The frequent occurrence of natural disasters has a serious impact on local social economy, which is also a main factor leading to the poverty in rural areas. Compared with urban households, rural households are more vulnerable to disasters and more prone to hard daily life after a disaster. In natural disaster-prone areas, disasters could impact the accumulation of livelihood asset, limiting the capability of rural households to recover from the disasters. Rural households usually spend their limited resources for basic lifestyle need after a disaster, hindering their ability to regain agriculture and animal husbandry activities. As a result, their poverty is further intensified by increasing livelihood vulnerability [13,14]. Most studies have been conducted to evaluate rural household livelihood in China. Li et al. [15] analyzed rural households' vulnerability by developing a livelihood asset assessment system for 4 areas in China. Yan et al. [16] established a livelihood vulnerability assessment method based on the sustainable livelihood framework in Tibetan Plateau area. He et al. [17] analyzed the spatial distribution of famers' livelihood asset using clustering analysis in Southwest China. Liu et al. [18] applied ...