Using a nationally representative survey, this study examines the performance of social protection in Azerbaijan from the perspective of poverty reduction. Empirical evidence presented suggests that social protection programmes have an important impact on poverty alleviation. However, poverty is still widespread. The findings demonstrate that the current system of social protection has several important limitations. First, a significant proportion of the poor population is not covered by the social protection system. Second, the poor typically receive a smaller share of total benefits than the non-poor. Finally, most social transfers are too small to lift households out of poverty. The current system of social protection in Azerbaijan requires further strengthening. In particular, the government should develop and implement new social assistance programmes specifically directed towards poverty reduction.