The relation between size differentials among households and disparities in income per household is investigated by means of the Gini- coefficient-decomposition method and regression analysis. The data for this empirical study are taken from Taiwan's Household Expenditure Surveys between 1976 and 1995. Our results confirm a positive association between total income of household and its size as well as a negative association between household income per person and size of household. In addition, intergroup variation among households of different sizes is found to be the primary factor in determining the trend of household income inequality during the past two decades. Moreover, the regression results also provide support for the notion that differentials in size of households contribute to inequality in total income of household but not to inequality in household income per person over the past two decades.