The study tests the effect of poverty-reduction intervention on family functioning reported by AIDS-orphaned children in extended families in Southern Uganda by asking two questions: (1) based on children's reports, how does poverty reduction intervention affect family functioning? and (2) to what extent do these effects vary by a child's gender and orphanhood status? Informed by the social causation theory, family stress model, and asset theory, the study aims to address the existing knowledge gap on effects of poverty reduction interventions on family functioning in low-income families caring for AIDS orphaned children in Uganda. We ran multilevel regression models using longitudinal data collected in a cluster-randomized controlled trial from N = 1410 children (n = 621 boys and n = 789 girls) recruited from 48 rural primary schools in Uganda. Survey data was collected every 12 months over the course of 5 years. The average age of children at enrollment was 13 years. We found significant positive effects of the intervention on family cohesion, family communication, and child-caregiver relationship. Effects vary by child's gender and orphanhood category. Intervention improves family communication for boys, while improving family cohesion and quality of child-caregiver relationship for girls. Single maternal orphans reported improved family communication, while single paternal orphans reported improved child-caregiver relationship. Poverty reduction interventions are important to improve family functioning for low-income families. Variations by child's gender and orphanhood status have not been reported in previous studies, and our findings underscore the importance of continued research in this area.