Data for the 130 largest metropolitan areas in the United States indicate that service sector employment increases inequality. The structure of inequality differs for men and women. For men, services increase inequality through disparities created by high earners whereas for women services increase inequality through disparities between median and law earners. These disparities in turn reflect the sectors in the service economy where men and women work and the kinds of jobs they hold. High inequality among the men is found in metropolitan areas specializing in producer and business related services with high proportions ofprofessional and managerial personnel. For women, inequality is related to retail trade and social services which require high proportions of unskilled, service related occupations. The data consequently suggest how the heterogeneous service sector provides a setting in which traditional linkages between gender and occupation influence inequality in earnings. No support is found for the position advanced by various vostindustrial theorists that services decrease inequality.