Majority of rural households in Nigeria are engaged in farming with small holdings and continue to experience low well-being in spite of several rural and agricultural development programs embarked upon by successive governments. Social capital has been identified as a potential instrument for improving well-being. This study examined the social capital and well-being of rural households in Southwest Nigeria using the capability approach. The primary data employed in the study were obtained with the aid of a semi-structured questionnaire from 439 households using a four-stage sampling technique. A wide range of indicators in nine dimensions of life of the households were used to generate a well-being index. Social capital variables used in the study were based on network participation, collective action and trust. Data were analyzed using descriptive statistics, fuzzy set and the ordered Probit model. Average meeting attendance was four out of five association meetings while well-being index in the study area is 0.5849. The result of the ordered Probit regression revealed that meeting attendance and trust improved well-being. The study recommends that rural households should be encouraged to increase their activities in social network to improve their well-being.