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This chapter describes a set of new directions in the understanding of how poverty and poverty-related individual and environmental risks influence children and families. It presents the definitions of poverty and of the environment, and discusses new and emerging multidiscipline research on the links between poverty and child and family outcomes with an emphasis on mechanisms. The chapter summarizes the current state of the evidence emerging from the basic sciences (e.g., neuroscience), psychology, sociology, and economics. It outlines the innovations in prevention and intervention efforts both to change poverty itself and to interrupt the links between poverty and poor child and family outcomes. Some of the most innovative poverty reduction or alleviation interventions are place- or setting-based, seeking to infuse entire communities or settings with resources meant to reduce the prevalence or impact of one or more poverty-related risks.