In the light of on-going debates about the sustainable agricultural intensification and sustainable development paradigms, this paper examined the linkages between integrated aquaculture-agriculture (IAA) value chain participation dynamics and the welfare of marginalized extremely poor indigenous households using a three-wave household panel dataset from Bangladesh. The distributional effect of IAA participation was also investigated by examining impacts across different value chain actors. We applied pooled Ordinary Least Squares, Random-Effects, and Standard Fixed-Effects, Heckit panel, and control function approaches to control for endogeneity of IAA participation and unobserved heterogeneity. We found that IAA value chain participation is positively correlated with household income and the consumption frequency of certain goods, especially fish consumption, and the benefits do not continue to accrue after discontinuing participation in the value chain. The results reveal that IAA value chain participation has higher impacts on the welfare of relatively wealthier households involved in production related IAA value chain activities than on landless, extremely poor households who were involved in upstream and downstream IAA value chain activities.