This paper discusses recent empirical research on how globalization has affected income inequality in developing countries. It begins with a discussion of conceptual issues regarding the measurement of globalization and inequality. Next, it presents empirical evidence on the evolution of globalization and inequality in several developing countries during the 1980s and 1990s. It then examines the channels through which globalization may have affected inequality, discussing theory and evidence in parallel. It concludes with directions for future research. The paper finds that exposure of developing countries to international markets has increased substantially in recent years, as measured by trade protection, the share of imports and exports in GDP, and capital flows. Inequality has increased in many developing countries, with some cases showing severe inequality. The paper investigates whether a causal link exists between the increase in inequality and globalization, examining several mechanisms through which openness is presumed to have affected inequality. It also discusses the methodological challenges in establishing such a link. The paper argues that the effects of globalization on inequality depend on various factors, including a country's trade protection pattern prior to liberalization, the form of liberalization and sectors it affected, the flexibility of domestic markets, and other concurrent trends. It concludes that the experience of developing countries in the last three decades has shown that globalization has not always led to the expected benefits for less skilled workers, and that the effects of globalization on inequality are complex and case-specific. The paper emphasizes the need for careful study of the nature of globalization and the individual circumstances in each country to address the potentially adverse distributional effects of globalization.This paper discusses recent empirical research on how globalization has affected income inequality in developing countries. It begins with a discussion of conceptual issues regarding the measurement of globalization and inequality. Next, it presents empirical evidence on the evolution of globalization and inequality in several developing countries during the 1980s and 1990s. It then examines the channels through which globalization may have affected inequality, discussing theory and evidence in parallel. It concludes with directions for future research. The paper finds that exposure of developing countries to international markets has increased substantially in recent years, as measured by trade protection, the share of imports and exports in GDP, and capital flows. Inequality has increased in many developing countries, with some cases showing severe inequality. The paper investigates whether a causal link exists between the increase in inequality and globalization, examining several mechanisms through which openness is presumed to have affected inequality. It also discusses the methodological challenges in establishing such a link. The paper argues that the effects of globalization on inequality depend on various factors, including a country's trade protection pattern prior to liberalization, the form of liberalization and sectors it affected, the flexibility of domestic markets, and other concurrent trends. It concludes that the experience of developing countries in the last three decades has shown that globalization has not always led to the expected benefits for less skilled workers, and that the effects of globalization on inequality are complex and case-specific. The paper emphasizes the need for careful study of the nature of globalization and the individual circumstances in each country to address the potentially adverse distributional effects of globalization.