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This study examines informal sector and poverty reduction in Bushenyi local council of Uganda. The study wasguided by correlational research design which was used to establish the relationship between women participationin informal sector and poverty reduction in Bushenyi district local council. The study participants were 98, whichcomprises food vendors, ward executive officers, microfinance bank staff and district council officers. Findingsrevealed that there is a significant relationship between women participation in informal sector and povertyreduction in Bushenyi district local council. On the basis of the findings, the researcher calls for policy-makers tocollaborate with women in the informal part of the economy in order to accelerate national development andimprove the position of women in the country. More so, an approach that can remove women’s legal andsocioeconomic constraints should be comprehensively taken, and an action plans nationally designed with variouswomen groups in broad consultation.Keywords: Informal sector, Legal constraints, Poverty reduction, Socioeconomic constraints, Womenparticipation