To gain a more comprehensive understanding of the impact of HIV and AIDS on rural households in Msinga, South Africa, the sustainable livelihoods framework was adapted. An ethnographic perspective was employed to examine: 1) the impact of HIV/AIDS-related illnesses on people's mind and spirit (the internal environment), and 2) the influence of institutional structures and processes (the external environment), in order to better understand 3) the actions taken by individuals and households in response to HIV and AIDS. Members of three support groups at a local drop-in centre were consulted about the impact of HIV and AIDS on their lives through focus groups, a questionnaire and in-depth interviews. The study shows that the psychosocial impact and associated coping strategies, as well as prevailing gender-based power relations and exclusion from social-exchange networks - which are not (readily) available factors in the sustainable livelihoods framework - affect people's lives in different ways and depend on the specific situation of the individual or household concerned. The study confirms the need to restore a household's resource base and to address psychosocial issues. However, the variation in impact to different households requires a diversified and holistic programme of development interventions. Copyright © NISC Pty Ltd.