This thesis analyzes the impact of poverty and HIV and AIDS knowledge on risky sexual behaviour. Risky sexual behaviour is defined as sex with non-marital/non cohabiting partners without using a condom. Two alternative measures of poverty are used: income and wealth status. Wealth status is used in order to establish the robustness of the poverty variable. The thesis uses dataset from the first wave of a study on young female adult (YAFAs) done in Balaka by the University of Pennsylvania under the Tsogolo La Thanzi (TLT) project. The project is a four year longitudinal study. The sample size was 1493.The decision to indulge in risky sexual behaviour is modeled as a choice model and estimated using a probit model. The study shows that income, wealth status, HIV and AIDS knowledge, are insignificant in determining risky sexual behaviour. However, perception on condom uses, education, and employment status are found to be predictors of risky sexual behaviour. The study concludes that strategies that empower women, including education and employment, are influential in determining the use of condoms. Furthermore, strategies which aim at changing beliefs on condom use are essential in encouraging safe sex.