Equitable allocation of health care resources is crucial for promoting health equity. Since the emergence of the resource allocation working party (RAWP) formula nearly three decades ago, many countries have implemented resource allocation policy reforms aiming to improve equity. Little is known about whether, how and the extent to which, most of these policies have actually improved equity. This study examined whether, and the extent to which,decentralisation of health resource allocation decision-making in Ghana has improved equityin funding within regions and explored the factors that influenced the equitable allocation of resources for health care in Ghana. The study used a mixture of quantitative and qualitative methods. Two of the ten regions inGhana: Ashanti and Northern, covering the southern and northern sectors of the country, were purposefully selected. Principal component analysis (PCA) was used to measure levels of relative deprivation of districts applied as a proxy of need. An equity-adjusted share index(EAS) was developed and used as a yardstick against which equity in funding was assessed.Factors influencing the equitable allocation of resources were explored qualitatively through open-ended interviews with policy makers and other health sector stakeholders. The study found that resource allocation in the Ashanti and Northern Regions were largely inequitable, in terms of differentially benefiting the most disadvantaged districts. The proportion of variance in the actual share of funds that could be explained by the predicted EAS was below50% for all the years examined, except for the allocation of government funds to the AshantiRegion for 1999, where the proportion of variance was 56%. Resource allocation in theNorthern Region favoured three urban districts over their rural counterparts. However, in theAshanti Region, there was a significant shift in resources from richer to poorer districts from2000 to 2002. The Kumasi Metro district, for example, saw its share of donor-pooled funds reduced drastically from 20% of the total budget in 2000 to 7.2% in 2001 and 5.6% in 2002.Key factors influencing resource allocation and equity included low funding of the health system, local capacity to utilise funds efficiently, manpower availability, politics, donor influence and the nature of collaboration with the local government.