Abstract: The present study was undertaken to determine the effect of capacity building on household expenditure and nutrition of farmers in Bangladesh. A field survey was conducted in three districts of Bangladesh between April 2006 and March 2007. The study areas have similar geographical and climatic conditions and land is equally suitable for vegetables, rice and other crops like oilseeds. The farmers with high capacity building ability earn more income than the farmers of low capacity building category. The additional income earning is associated with the improvement of technical, social, natural and human capital of farmers. The farmers with high capacity building category changes their household expenditure pattern to uptake a balanced nutrition. They are able to uptake balanced nutrition reducing their consumption expenditure percentages and invest their money in productive areas which increases their per capita income and savings. Therefore, capacity building influences positively the balanced nutrition of the farmers changing their consumption expenditure pattern.