Based on household food security surveys conducted in Ethiopia, this study seeks to understand the roles and limitations of income transfer projects as determinants of households’ food security. By covering the Food-For-Work Programs (FFWPs) and the Productive Safety Net Programs (PSNPs), the study shows that these programs served as temporary safety nets for food availability, but they were limited in boosting the dietary diversity of households and their coping strategies. Households which participated in the programs increased their supply of food as a temporary buffer to seasonal asset depletion. However, participation in the programs was marred by inclusion error (food-secure households were included) and exclusion error (food-insecure households were excluded). Income transfer projects alone were not robust determinants of household food security. Rather, socio-demographic variables of education and family size as well as agricultural input of land size were found to be significant in accounting for changes in households’ food security. The programs in the research sites were funded through foreign aid, and the findings of the study imply the need to reexamine the approaches adopted by bilateral donors in allocating aid to Ethiopia. At the same time the study underscores the need to improve domestic policy framework in terms of engendering rural local institutional participation in project management.