Abstract We draw on leading theories about the structural causes of racial inequality in the US to investigate inter-metropolitan differences in white and black per capita income. The analysis, which is based on a sample of 112 metropolitan areas and uses 1990 census data, examines the influence of spatial, economic, and demographic factors on black-white income inequality. Our results show severe income inequality between blacks and whites in most metropolitan areas, with black per capita income being 55% of white per capita income, on average. We find that racial educational inequality and unemployment differences were the strongest predictors of racially based income inequality. We also find that metropolitan areas that are highly ranked on a business and financial dominance hierarchy have the most interracial income inequality. However, when a metropolitan area has a high level of manufacturing employment vis-a-vis low service employment it has less income inequality. We discuss the implications of these and other findings for theories about, and public policy regarding, urban inequality.