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Protected areas are an important strategy to safeguard biodiversity. However, if social development is not considered, biological conservation targets may not be achieved. In this empirical study, we assess the relationship between poverty and conservation goals in dry forests within a 62,000-ha Brazilian National Park (Caatinga biome). We conducted 81 structured household interviews between January and July of 2016 to assess socioeconomic, resource management and land-use variables. We used non-parametric analysis of variance to test for differences in socioecological variables among families living inside and outside the Park and both (double dwelling). The majority of families (76%) residing inside the Park were living below the poverty line while less than 14% in outside and double dwelling residences faced the same issue. Families living inside the park had lower socioeconomic conditions such as limited water availability, poor house infrastructure, low income, and high dependence on firewood than outside and double dwelling families. They were also more dependent on external financial support and natural resources. We found that failures in protected areas inception and implementation have driven people towards a mutually reinforcing and declining situation in which negative socioeconomic outcomes are associated with nature degradation. Therefore, our results suggest that the future of dry forests, characterized worldwide by the presence of low-income populations, will be largely dependent on conservation strategies that address poverty alleviation and human well-being.