Using 2005 and 2010 Household Income and Expenditure Survey (HIES) data, the paper examines income inequality and poverty in Bangladesh with focus on their spatial dimensions. As disparity among administrative divisions is small, such inequalities, especially in the urban areas, need policy attention. As education appears to play an important role in increasing urban inequality, raising the level of general education is essential. Similarly, wages and salaries contribute to mitigating inequality which points to expanding opportunities for earning formal incomes. Though the effects are likely to be small, transfer programmes may be expanded to raise incomes among the poorest. In addition to raising general educational level, it is necessary to provide primary education throughout the country in order to mitigate poverty. It is imperative to raise agricultural productivity in both rural and urban sectors. Furthermore, non-agricultural activities should be promoted according to the pattern of comparative advantages.