This paper uses income decomposition techniques to demonstrate the importance of livestock income in improving rural income distribution. It is based on three-year household panel data (1986 to 1989) from rural Pakistan. The paper first decomposes total income among five sources: agricultural, nonfarm, livestock, rental and transfer. This shows that livestock income is inequality-decreasing and that it makes the smallest contribution to overall inequality. The study then decomposes the sources of livestock inequality by type of animal. While livestock income from male animals has a negative impact on equity, livestock income from one female animal (local cow) has a positive effect.