Poverty is a global issue, especially in African countries. Numerous strategies have been made to alleviate poverty among the poor in order to reduce poverty. Zakat is one of the programs designed to alleviate poverty, particularly in Muslim countries. It is a transfer of ownership of an individual's income to a person or group of people living in poverty. Most studies conducted in Zakat user countries focused on the role of Zakat in reducing poverty. Furthermore, in Somaliland a little is known about the impact of Zakat on poverty. So the purpose of this paper is to examine the impact of Zakat on poverty reduction in the Koodbuur district, Hargeisa in Somaliland. A cross-sectional survey was conducted with 320 Zakat beneficiary households and 278 non-receiver households, selected at random to obtain household data. A propensity score matching method of impact evaluation was used to estimate the pure impact of Zakat on poverty reduction, and logistics regression analysis was also used to identify determinants of participation in the Zakat program. Results showed that sex, marital status, family size, health status, employment status, housing, and education level were found to be determinant factors in participating in the program. The results obtained signify that Zakat has a significant impact on reducing poverty in Somaliland. The estimated result showed that households who received income from the Zakat program had raised their annual income by more than 1503076 shillings. Accordingly, based on the given poverty gap &squared poverty gap index of the treated and non-treated households, it was founded that households who received income from the Zakat program had reduced the poverty gap index by 0.062 and the severity of poverty index by 0.038. Since zakat has a positive impact on poverty reduction, this paper recommends that Somaliland's ministry of endowments and religious affairs participate fully in Zakat collection and contribute a substantial budget for Zakat organization.