The research was about the Household performance contract and poverty reduction in the rural area of Shingiro sector, in Musanze District, Rwanda (2017-2018). The target population of the study considered Head of households and 8 Key Informants including the local leaders in different villages and the total number of households is 450. Data were coded, recorded and edited. The analysis used SPSS, and excels as tools and frequency, percentages were calculated and interpreted. As the first objective was to assess the level of participation of the population in household performance contract in the rural area of Shingiro sector in Musanze district; The findings showed that though households plan the level of participation in planning is very small (43.46%) and participation in implementation is moderate (63.46%) while in evaluation the participation is 37.75%, which is still a gap to be covered. The indication is that they need to be trained, explained what performance contract is, its role, the objective and the contribution to poverty reduction to improve their standard of living before they sign the activities plan. Again, the second objective was to examine the effect of household performance contract on poverty reduction in the rural area of Shingiro sector; Musanze District, the findings show that the activities highly affect the infrastructure and socio-economic living condition at household level which is still a big problem. As many of the respondents were households who think that there is an effect of household performance contract on poverty reduction. As the third objective was to analyze the challenges associated with the level of household participation to the performance contract on poverty reduction in the rural area of Shingiro sector; Musanze District, the findings indicated that in evaluation, the lack of citizen (knowledge and skills) was at the high level. The average for all Challenges indicated that there is a big gap in evaluation of households’ performance contract