Much of the global wildlife trade is sourced from biodiversity-rich developing countries. These often have high levels of poverty and habitat loss, particularly in rural areas where many depend on natural resources. However, wildlife collection may incentivize local people to conserve habitats that support their livelihoods. Here we examined the contribution of the commercial collection of live animals to rural livelihoods in Madagascar, one of the world’s most important biodiversity hotspots. Using questionnaires, we investigated the prevalence, profitability relative to other livelihood activities, and local importance of the trade, and its capacity to provide incentives for conservation. Thirteen percent of households were engaged in live animal collection in the study area (~5% trapped reptiles and amphibians and the remainder trapped invertebrates). This formed part of a diverse livelihood strategy, and was more profitable than other activities (in terms of returns per unit of effort), with median earnings of ~US$100 per season (~25% of Gross National Income per year). However, trapping was part-time, usually undertaken by poorer members of the community, and often perceived as opportunistic, risky, and financially unreliable. Further, trappers and non-trappers held similar perceptions regarding conservation, suggesting wildlife trade currently does not incentivize enhanced stewardship of traded species and their habitats. Our study brings together a range of methodologies to present the most comprehensive insights into livelihoods and conservation in poor rural communities involved in the commercial collection of live animals to supply international trade. This improved understanding of the wider socioeconomic dimensions of wildlife trade can inform policy and management interventions for both the threats and opportunities associated with global trade in biodiversity both in Madagascar and more generally