This paper analyses the income inequality in Lesotho districts using Household Budget Surveys of 1994/95 and 2002/03. Lorenz curves are used to measure the degree of income inequality in each district. The results show that the income inequality declined in most districts between the two survey periods except in Butha-Buthe where it remained constant. Despite these declining trends inequality remains relatively high in comparison to international standards. In the Lorenz ordering, the phenomenon of Lorenz crossing is revealed.