Research of farmers’ livelihood capital contributes significantly to understanding the mechanism of regional poverty, advancing strategies to enhance the sustainability of poor farmers’ livelihoods, and formulating policies for regional targeted development. Taking the Nepalese and Chinese parts of the Koshi River Basin (KRB) as an example, this study investigates the current situation of shortages of livelihood capitals between the upper and lower reaches in China and Nepal separately, and explores the potential causes of differences in livelihood capital from the diverse perspectives. Results reveal that the comprehensive livelihood level in the basin is poor, and there are diverse levels of shortage and differentiation of livelihood capital. The total spatial difference in livelihood capital is minor and distributed at random or independently, and it was discovered that financial capital and social capital are the scarcest capital in the entire basin. These results also illustrate the spatial patterns of financial capital prevail in the Nepalese part of the basin. The livelihood capital at the district level is significantly related to adult literacy rates, levels of regional employment, the number of livestock at the end of the year, regional livestock product production, labor productivity, per capita of arable land area, crop production areas, and economically active populations. The findings produce a theoretical basis for the formulation of appropriate livelihood adaptation strategies and the establishment and enhancement of poverty reduction systems and policies in the KRB.