Farm households in the Andean region of South America face serious livelihood challenges, including a poor natural resource base and declining agricultural yields. Conservation agriculture has been identified as a potential solution to environmental degradation and the associated poverty and food insecurity in the region. This study analyses the potential economic impact of conservation agriculture in two sub-watersheds in central Ecuador utilizing a linear programming model and data from experiments in farmer fields. The model found that specific cover crops, crop rotations and reduced tillage designed to reduce soil erosion and increase soil organic matter can lead to increased incomes for farm households in a time period of as short as two years. It appears that conservation agriculture practices have the potential to improve the livelihoods of the rural poor in Ecuador because conservation agriculture activities entered the revenue-maximizing model solution for both sub-watersheds.