In the changing market environment of livestock products, the delivery of animal health services is emerging as an important priority area for enhancing the competitiveness of poor livestock producers. At the same time, governments are continuing to face serious budgetary difficulties and are finding it difficult to expand the reach of these services or improve service quality. In this context of a changing environment and dwindling public resources, this paper revisits the economic framework that has thus far guided thinking about public and private sector roles in the provision of animal health services and examines the ongoing debate on livestock service delivery for the poor. The paper highlights the importance of strong institutions and appropriate legislation for regulating behaviour and enforcing contracts and re-emphasises the idea, which is supported by economic theory, that there is a need for task sharing between the public and private sectors. The paper further emphasizes the need for: a) integrating the debate on livestock service delivery with the larger debate on political economy and institutional development, and b) ensuring service access in poor marginal areas by working through membership organisations, self-help groups and civil society organisations, and by promoting the use of para-professionals and community-based animal health delivery systems.