This paper aims to identify the significant determinants of income inequality in developed and developing countries. The empirical analysis of the panel of 147 countries over the period from 1980 to 2010 shows that for developed countries, the significant determinant of income inequality is public spending on education, and for developing countries, the significant determinants are public spending on education, affordability of financial resources, and infrastructural development. Furthermore, no significant evidence supporting the existence of Kuznets' curve is found.