Contrary to predominant neoliberal ideology that argued higher economic growth rates would eventually lead to better results in terms of income distribution, the last three decades witnessed high economic growth rates accompanied by rising income inequalities in most countries worldwide. Abundance of natural resources in several developing countries had significant implications for their economic growth and subsequent income inequality levels. Further, neoliberal globalization manifested itself in increased foreign direct investment and trade openness impacted world economies significantly. This research examines the effects of natural resource dependency, neoliberal globalization, and state-institutional factors alongside the internal development model on income inequality in a set of 96 developing countries for the period 1980–2010. Models for Prais–Winsten regressions with panel corrected standard errors show that within the internal development model, population growth rates are the most significant factor in influencing income inequality levels. Natural resource dependency is equally important and is positively associated with increasing inequalities. More detailed analyses of different types of energy-rich countries reveal varying results exemplifying the importance of exploring how different types of natural resources might affect income inequality levels rather than their sheer magnitude. Consistent with previous research, foreign direct investment indicates a robust positive association with increasing income inequalities whereas trade openness exhibits a negative association signifying the positive effect deindustrialization that took place in advanced countries might have had on developing countries. Finally and counterintuitively, democracy is associated with higher income inequalities whereas institutional quality is negatively associated with income inequality.