Poverty alleviation resettlement (PAR) is China's largest-ever resettlement program and one of China's flagship poverty alleviation initiatives. Resorting to this state-led conversation and development program, the central and provincial governments aim to lift the poor out of the poverty trap and into sustainable livelihoods, by delivering improvements in housing conditions, infrastructure services, public amenities, and living standards. Taking Ankang as an example, this study examines the PAR from the perspective of vulnerability through a household survey conducted in Ankang prefecture of Shaanxi province, China. A total of six townships in Ankang are covered, with 657 valid questionnaires collected. This study shows that there is a difference in exposure, sensitivity, and the adaptive capacity of rural households with different relocation characteristics, hence generating different livelihood vulnerabilities. The PAR generally achieves the target of livelihood vulnerability reduction. Specifically, the project-induced relocation has a significant positive effect on vulnerability, but there is a significant negative correlation between livelihood vulnerability and relocation region, relocation time, and relocation subsidy. Challenges and problems remain to be addressed for the next phases of the PAR, including diminishing the financial burden on those relocated and providing free public transportation services, carrying out community-building programs and updating the household registration institution, balancing the redistribution and sharing of farmland, furnishing assistance measures for employment searches and training in specific skills, and creating an impartial project to safeguard the non-movers from the significant negative impacts on their physical and spiritual dimensions.