Social capital is an important characteristic of a community and is one of the components of the asset pentagon of the sustainable livelihood framework. The study aimed at assessing the levels and dimensions of social capital and how social capital influences other livelihood capitals. A Cross-sectional survey of a random sample of 208 households was conducted in Masindi and Hoima Districts in Uganda to assess the current livelihood conditions and strategies for improving rural livelihoods. An Index of social capital was generated using density of group membership and three levels of social capital where generated i.e. high, medium and low. Two dimensions of social capital (bonding and bridging) were considered. Results showed that households with high and medium social capital had enhanced skills to solve problems, do research and bargain with middle men. Social capital empowered more women to participate in decision making, fostered asset base creation and use of natural resource management technologies. There was a significant difference between level of social capital and participation in collective farming. Households with high social capital rated highly the community level of trust, reciprocity, and women’s confidence. However, there was no significant effect of social capital on household income. In conclusion, there was a positive relationship between level and dimension of social capital and access to livelihood assets implying that strengthening social capital is a powerful way to improve communities and requires consistent and effective approaches to build and reinforce the social and human capital.