Foreign aid and its effectiveness in combating poverty in the developing world have long been contested in the discourse of international development.This study analyzes the geographic and sectoral allocation of foreign aid in Armenia within the framework of Millennium Challenge Account – Armenia Program by examining rural poverty issues prevalent in the country. Although the Program has addressed causes of rural poverty, foreign aid allocation within the scope of the Program and the geographic distribution of poverty in the country reveals that it has mostly targeted less poor regions which are more favorable for agricultural activities. Nevertheless, possible inferences about emanating agricultural transformation process propelled by the Program should be treated with caution given the significant share of the labor force employed in the primary sector and stagnating employment opportunities in non-agricultural sectors.