Background The relationship between HIV and poverty is complex and recent studies reveal an urban-rural divide that is not well understood. This paper examines the urban-rural disparity in the relationship between poverty and HIV infection in Kenya, with particular reference to possible explanations relating to social cohesion/capital and other moderating factors. Methods Multilevel logistic regression models are applied to nationally-representative samples of 13,094 men and women of reproductive age from recent Kenya Demographic and Health Surveys. Results The results confirm a disproportionate higher risk of HIV infection among the urban poor, despite a general negative association between poverty and HIV infection among rural residents. Estimates of intra-community correlations suggest lower social cohesion in urban than rural communities. This, combined with marked socio-economic inequalities in urban areas is likely to result in the urban poor being particularly vulnerable. The results further reveal interesting cultural variations and trends. In particular, recent declines in HIV prevalence among urban residents in Kenya have been predominantly confined to those of higher socio-economic status. Conclusion With current rapid urbanization patterns and increasing urban poverty, these trends have important implications for the future of the HIV epidemic in Kenya and similar settings across the sub-Saharan Africa region.