Poverty is a social reality for the human beings throughout the history. The historical events also show that poverty has been a major factor affecting the social life. This article examines how ‘poverty’ is conceived in the fundamental sources of Islam, in what ways and forms it was practiced in the traditional Islam, and how it affected the Muslims in the history. Islam does not see poverty as a desirable virtue, but it accepts it as a serious problem and urges people to safeguard from its hardships. Islam at the same time proposes various solutions of this problem within society. In this context, Muslims are encouraged to seek wealth, for it is one of the blessings of God. The authentic hadiths of the Prophet Muhammad also consider poverty a threat to society, and therefore it must be eliminated. However, the representatives of the Islamic mysticism, fearing that wealth may take people away from the activities pleasing God and from leading a virtuous life, see poverty as a blessing of God. Unfortunately, this view of the Sufis has been misunderstood by many Muslims and it has affected them along with their countries very negatively. Therefore, this article will try to investigate the real dimension of poverty and prosperity in the light of the authentic Islamic sources.