Abstarct: This study examines the causes of income distribution inequality across Iranian provinces, with an emphasis on economic, demographic, and structural factors. Regional income inequality has remained a persistent challenge in Iran, despite the implementation of various regional development and fiscal redistribution policies. Using unbalanced provincial panel data and the Gini coefficient as the dependent variable, the study analyzes the effects of per capita income, unemployment rate, economic participation rate, sectoral employment shares, and population. Panel econometric models, including pooled, fixed effects, and random effects models, are employed along with relevant diagnostic tests. The results indicate that the fixed effects model with robust standard errors is the most appropriate specification. Findings show that the economic participation rate has a statistically significant effect on income inequality, while other variables exhibit weaker or insignificant impacts. Overall, the results suggest limited effectiveness of existing fiscal and regional policies in reducing provincial income inequality. The study highlights the need for revising regional development strategies and designing targeted policies baxsed on provincial structural characteristics.