This study uses a small rural household survey in Mexico (2003) to examine the impact of internal and international migration and remittances on inequality and poverty in rural Mexico. Decomposing income by source, the authors find that internal remittances (from Mexico) and international remittances (from US) have differing effects on poverty and income inequality. On poverty, the authors find that a 10 percent increase in international remittances will reduce the rural poverty headcount by 0.8 percent, and a similar increase in internal remittances will reduce the poverty headcount by 0.4 percent. With respect to inequality, while a 10 percent increase in international remittances will increase overall rural inequality by 2.8 percent, a similar increase in internal remittances will reduce rural inequality by 0.1 percent. The authors stress that these inequality effects differ over region and time. As the incidence of international migration spreads in rural Mexico, its effects on rural inequality become more equalizing over time.