The study viewed the impact of non- fann income on income inequality m rural Tigray byrndecomposing the rural households income in to fann mcome, non- farm income, remittance,rnrental income and other incomes,rnAs a method of data analysis, the study used Gini- decomposability technique and ProbitrnregresslOn,rnThe result indicated non- fann income particularly of wage employment as inequality reducingrnincome source; implying the greater importance of wage employment sources to rural poorrnhouseholds than rural rich households, The study result has also indicated Age (elders) of anrnindividual, Illiteracy, Primary and Secondary education and Distance to transport facilityrn(individuals at fmihest distance) positively related to the probability of being non- fann selfrnemployed while Gender (being female) and Marital status negatively related, The result alsornexplained, though education required in some self employment activities, illiterates have higherrnparticipation because the majority of these activities were found marginalized/ inferior,rngenerating lower income and did not attract educated,rnTherefore, in order to minimize the existing income gap in rural Tigray Govemment shouldrndesign appropriate policy and programs such as investment policy and productive safety netrnprograms in the area so that rural poor households wi ll be benefited from employment. Moreover,rnGoverrunent should work on modemizing the traditional self employment activities so as tornincrease their eamed income and also promote migration to increase remittance