The study investigates the impact of microfinance banks on poverty alleviation in Ondo state, Nigeria. A simple random sampling technique was used to collect primary data from both customers and the staff of some selected micro finance banks in the state. The data collected from respondents through structured questionnaire were analyzed using descriptive statistics. Descriptive statistics such as frequency count and simple percentage were used to analyze the data gathered. The chi square was used to test the hypotheses of the study at 0.05 levels of significance. Findings from the analysis revealed that the services of microfinance banks reduce the level of poverty in the state. The result also showed that the CBN provides a conducive and enabling environment for the growth and sustainability of micro finance banks. Following from the findings of this study the researcher recommended that the microcredit institutions should increase the credit facilities to the customers at a low rate of interest to promote economic activities so as to make greater impact on the poverty reduction of people of Ondo State.