In Turkey, the GDP per capita of eastern regions, where the Kurdish population is dense, is significantly lower than that of the rest of the country. The aim of this paper is to provide a quantitative analysis to investigate the contribution of household characteristics and regional disparities on racial/ethnic inequalities in household income, particularly across Turks and Kurds. Based on the results of regression-based decomposition analyses, there exist significant income differences between Turks and Kurds. However, this difference significantly diminishes if the household head is working. It is also observed that the household income increases with education, while decreases with migration and being settled in economically disadvantaged regions. Results also indicate that differential returns to Turks and Kurds on observable characteristics are lower in higher income quintiles.