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Land degradation, especially natural forest land degradation (NFLD), is a severe environmental concern in China. This natural disaster itself and its derivative control policies have caused some impacts on surrounding farmers’ livelihood level and strategies, but the literature on the sustainable livelihood of different households in NFLD vulnerability is limited, and there is an urgent need to bridge the gap and conduct studies on the sustainable livelihood of Changting, Libo, Lixian, Menghai and Wuxi, the typical NFLD-prone areas in China. A new livelihood sustainability index (LSI) including livelihood asset, livelihood strategy and sustainability engagement is constructed to assess the basic situation. The results showed that: (1) The overall LSI of five NFLD areas was not high, and the social, financial and natural assets, in particular, were relatively low. A disparity was found among the five areas, and the rank sequence of the LSI value was sorted in a descending order: Changting > Menghai > Libo > Lixian > Wuxi. (2) In detail, farmers in Changting had the relative highest LSI because of the inherent high value of livelihood assets, which constrain the scores of the livelihood strategy and sustainability engagement. (3) Households in Libo, Menghai and Lixian had middle level LSI scores. The relative low livelihood assets in Libo and Menghai drove parts of local farmers to carry out off-farm/forestry employment, leading to high scores of livelihood strategy, while farmers in Lixian had lower livelihood diversification scores and higher sustainability engagement due to their working content for the local forestry bureau. (4) The low scores of the livelihood asset and sustainability engagement restricted farmers in Wuxi. A discussion of LSI in the NFLD vulnerability was conducted to determine the characteristics and analyze the reasons. Accordingly, targeted policy recommendations were proposed to realize a sustainable livelihood in NFLD areas.
