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Research on the transactional dynamics of sexual relationships in sub-Saharan Africa frames material exchange, or “gifting,” as an indication of power on behalf of the giver. But what if the gift-givers are adolescent boys? In this paper, using longitudinal survey data, we examine how being in a sexual relationship in which gifts are exchanged is associated with school drop-out for adolescents in primary school in rural Malawi. We focus particularly on how these associations differ by gender and poverty level, a question that has not been addressed in the existing literature on sexual relationships among students in sub-Saharan Africa. We have three main findings. First, both boys who gave gifts and girls who received gifts were significantly more likely to drop out of school relative to their peers who had never had sex, with a larger association for girls. Second, poverty had a similar association with school drop-out for boys and girls. Lastly, we find that poverty level has different implications for school drop-out by gender. Girls who received gifts were more likely to drop out of school, regardless of their economic background. In other words, receiving gifts effectively erased the benefits of being non-poor for school dropout for girls. For boys, however, the consequences of gifting differed significantly by poverty level. Poor boys who reported giving gifts to their most recent sexual partner were predicted to be twice as likely as non-poor boys to drop out of school.