The Mexican state has promoted women’s group-based income-generating projects for nearly three decades. Although most state-supported income-generating projects discontinue after external funding ends, some continue to operate. While existing studies have highlighted several reasons for dis-/continuation, none have focused on the role of moral obligations in shaping women’s everyday livelihood practices and few have closely examined context dependent external factors. In order to provide more effective support for women’s collective efforts to strengthen sustainable livelihoods, we developed the framework peasant moral community economies. This framework draws on that of household moral economy, community economies and peasant moral economy as informed by feminist scholars’ recognition of gender as process. Through our framework we investigated how intra-group dynamics and groups’ relationships within their members’ households and communities in their own specific environments shape group operations through examination of three initially state-funded women only but now long-running women-led cooperatives in rural Hidalgo, Mexico. Data was collected through surveys, focus group discussions, and in-depth interviews with cooperative members, their families and community authorities supplemented by secondary literature review and observation. We found that context specific manifestations of reciprocity and the right to subsistence were common to both household and community arrangements. While context specific manifestations of these moral principles enabled new gendered subjectivities that contributed to gender transformations and livelihood production, we also found that the same principles reinforced female altruism and exacerbated women’s time poverty. The framework of peasant moral community economies allowed us to see how both contradictory gender transformations and time poverty provided conditions that supported the durability of the cooperatives. We conclude that support for women’s collective efforts for sustainable livelihoods may be more effective if we recognise how livelihoods are produced also outside the cooperative by paying particular attention to context specific contradictory gender and moral dimensions.