Kenya’s economy is predominantly agriculture-based, with tea representing one of the most significant cash crops contributing to national income, foreign exchange, and rural livelihoods. This study assessed the socio-economic impact of the tea industry on rural livelihoods in Kenya, focusing on three key tea-growing counties: Kericho, Kisii, and Kiambu. The research employed a descriptive survey design and stratified random sampling to select 60 smallholder tea farmers, complemented by secondary data from the Kenya Tea Development Agency (KTDA) and government records. Data were collected through structured questionnaires and analyzed using descriptive statistics and thematic interpretation. Findings revealed that 68.3% of respondents relied exclusively on tea farming for income, while 25% combined agriculture and service-based activities, and 1.7% integrated agriculture, service, and private business. County variations were notable, with Kisii farmers demonstrating the highest dependence on agriculture (90%), while Kericho farmers exhibited greater income diversification (45% combining agriculture and service). The tea industry emerged as a critical employer, generating over one million direct and indirect jobs nationally and significantly supporting rural economies through KTDA factories, transport, warehousing, and auction-related services. Beyond income, tea farming was linked to improved rural infrastructure, housing standards, education, and food security, contributing to enhanced living conditions and rural industrialization. However, emerging challenges such as mechanization in large-scale estates threaten employment levels, raising equity and sustainability concerns. The study concludes that tea remains a cornerstone of rural socio-economic development, but sustaining its benefits requires targeted interventions. Recommendations include promoting income diversification, balancing mechanization with job protection, strengthening rural infrastructure, enhancing farmer capacity building, and fostering value addition initiatives to maximize earnings. Policy frameworks ensuring fair pricing and timely payments are also essential to stabilize incomes and improve livelihoods for smallholder farmers. These insights provide a foundation for policymakers, industry stakeholders, and researchers seeking to optimize the socio-economic contributions of Kenya’s tea sector amid evolving market and technological dynamics.