Policy discussions on 'fragile states' have become one of the key policy agendas in international development. At the same time, development agencies are progressively involved in assistance in conflict-affected countries. Some of the key issues in the discussions include how to reduce poverty as well as how to ensure durable peace in the fragile states by utilising development instruments. This paper particularly focuses on the Poverty Reduction Strategy (PRS) process, which was introduced to low-income countries, including post-conflict countries, by the international financial institutions (IFIs). Itsfeasibility and implications of the process for peace-building are scrutinised by looking at postconflict Sierra Leone as a case study. It highlights the lack of consideration for conflict-related issues in its framework, even though there are some embedded propositions that can theoretically contribute to peace-building. Based on the case study, however, it is argued that it is still essential for the PRS process to be reformulated to reflect greater 'conflict-sensitivity', if it were to be one of the remedies for peace-building and poverty reduction in fragile states.