Concern has been expressed both by indigenous people and by academic analysts that large-scale resource development may sharpen inequality in what are (relatively) egalitarian indigenous societies. Much of the academic literature suggests that resource development does indeed have this effect, but such claims are usually based on very limited empirical evidence. In addition, the literature is lacking in conceptual frameworks which allow the concept of inequality to be adequately specified, take into account the quite different forms of income which resource development can generate, explain (rather than simply document) specific changes in income distribution and, on this basis, provide grounds for policy prescription. This article seeks to develop such a framework.