Abstract: Livelihood capital forms the foundation for farmers to engage in entrepreneurial activities, which play a critical role in enhancing the endogenous development capacity of poverty-stricken areas and consolidating the achievements of poverty alleviation. This study, based on the sustainable livelihood analysis framework, employs PLS-SEM and fsQCA methods to investigate the net and combined effects of livelihood capital on the entrepreneurial behavior of rural households relocated from inhospitable areas. The findings are as follows: 1) Physical capital, financial capital, human capital, and social capital all have significant positive effects on the entrepreneurial behavior of relocated rural households, with the impact ranking as follows: financial capital > social capital > physical capital > human capital. Natural capital, however, has a significant negative effect on entrepreneurial behavior; 2) Financial capital is a necessary condition for triggering entrepreneurship among poverty-stricken farmers. Moreover, the study identifies two livelihood capital combination configurations: Configuration 1 features a lack of natural capital but includes good human and social capital; Configuration 2 comprises social capital, human capital, and physical capital. Thus, optimizing the livelihood capital mix is crucial to promoting the entrepreneurial activities of relocated rural households and providing practical guidance for addressing regional relative poverty.