As　payment　for　ecosystem　services　(PES)　programs　proliferate　globally,　assessing　their　impact　upon　households＇　income　and　livelihood　patterns　is　critical.　The　Sloping　Land　Conversion　Program　(SLCP)　is　an　exceptional　PES　program,　in　terms　of　its　ambitious　biophysical　and　socioeconomic　objectives,　large　geographic　scale,　numbers　of　people　directly　affected,　and　duration　of　operation.　The　SLCP　has　now　operated　in　the　poor　mountainous　areas　in　China　for　10　y　and　offers　a　unique　opportunity　for　policy　evaluation.　Using　survey　data　on　rural　households＇　livelihoods　in　the　southern　mountain　area　in　Zhouzhi　County,　Shaanxi　Province,　we　carry　out　a　statistical　analysis　of　the　effects　of　PES　and　other　factors　on　rural　household　income.　We　analyze　the　extent　of　income　inequality　and　compare　the　socio-demographic　features　and　household　income　of　households　participating　in　the　SLCP　with　those　that　did　not.　Our　statistical　analysis　shows　that　participation　in　SLCP　has　significant　positive　impacts　upon　household　income,　especially　for　low-and　medium-income　households;　however,　participation　also　has　some　negative　impacts　on　the　low-and　medium-income　households.　Overall,　income　inequality　is　less　among　households　participating　in　the　SLCP　than　among　those　that　do　not　after　7　y　of　the　PES　program.　Different　income　sources　have　different　effects　on　Gini　statistics;　in　particular,　wage　income　has　opposite　effects　on　income　inequality　for　the　participating　and　nonparticipating　households.　We　find,　however,　that　the　SLCP　has　not　increased　the　transfer　of　labor　toward　nonfarming　activities　in　the　survey　site,　as　the　government　expected.