The main purpose of this study was to explore how different challenges and solutions contributed separately to improving (or exacerbating) semi-nomads’ livelihood in Dishmook District, Iran. A total number of 27 villagers were selected for the study using theoretical sampling. Using grounded theory method, the collected data were analyzed. The study revealed that poverty and natural resources degradation were severe in the area of study. The study, also, revealed that there was not a simple and direct relationship between the semi- nomads' poverty and environmental degradation and both poor and rich individuals were involved in degrading the environment. Finally, two theoretical models explaining how different challenges and solutions contributed separately to improving (or exacerbating) semi-nomads’ livelihood were generated.