This article examines capability deprivation as the basis for analyzing poverty. The capability approach, developed initially by Amartya Sen, questions the “informational space” on which considerations of poverty, inequality, justice, and so forth, should be based. According to the capability approach, the appropriate “space” for analyzing poverty is not what people have, nor how they feel, but what they can do and be. After providing an overview of the concepts that comprise the capability approach, this article discusses three key questions within the literature regarding the nature of the approach, namely: the question of functioning and/or capabilities, the question of a capability list, and the question of aggregation. It also describes some prominent empirical applications that have been inspired by the capability approach and concludes with an assessment of the current state-of-the-art literature on the capability approach.