The paper presents an assessment of poverty and inequality in the Slovak Republic and a comparative analysis of indicators of selected countries. From 1992 the poverty in the Slovak Republic was evident, lasting and befalling more and more inhabitants. Household living costs were affected by price liberalisation. Inequality increased too. In 1996, inequality was correlated with the size of settlements and reached the highest level in settlements with over 50 thousand inhabitants. The share of population under poverty line has been increasing as well. Poverty assessment depends on the poverty line, which changes over time and across the regions. Distribution of household income in the Slovak Republic by the size of settlements is shallow and densely concentrated around the poverty line. Therefore high sensitivity of poverty incidence, its depth and severity is observed. Contrary to the situation in developing countries, where the highest share of poor is observed in rural areas, the share of the Slovak Republic population under the poverty line was the highest in the settlements with 5 thousand to 10 thousand inhabitants in 1996