External and internal aspects of vulnerability in urban societies have so far remained either unexplored or neglected. Social geographers, economists, sociologists and political scientists have paid more attention to the study of external aspects of vulnerability concentrating on rural societies in the developing world. In this regard, Sri Lanka is no exception. It is against this background, this study has made an effort to fill this gap at least to certain extent. This study develops an Experimental Livelihood Security Index to identify households that are vulnerable to poverty in a low income urban settlement. Having developed the index, the study explored the livelihood strategies adopted by the selected sample households in order to understand the ways and means used by them to make their livelihoods more secure and less vulnerable to chronic poverty.