Areca leaf sheaths have emerged as an important rural resource in Karnataka, particularly in areca-growing regions such as Shivamogga, Chikkamagaluru, Dakshina Kannada, Udupi, Davanagere, and parts of Kodagu. Traditionally treated as agricultural waste, these leaf sheaths are now increasingly utilized in the production of biodegradable plates, bowls, and eco-friendly tableware. This transformation has opened up new avenues of income generation and employment for rural households, farmers, and micro-enterprises. The present study analyses the economic contribution of areca leaf sheath activities to rural households in Karnataka. It examines income generation from raw material sales, employment opportunities across various stages of production, and the profitability of small-scale enterprises. The study also highlights value addition, marketing channels, environmental benefits, and policy support mechanisms. The findings indicate that areca leaf sheath activities have strong potential to enhance rural livelihoods, promote sustainable production systems, and support the circular economy. With improved infrastructure, access to credit, training, and better market linkages, this sector can significantly contribute to household income, women's empowerment, and eco-friendly industrial development in Karnataka.