Objectives. Previous studies have linked state-level income inequality to mortality rates. However, it has been questioned whether the relationship is independent of individual-level income. The present study tests whether state-level income inequality is related to individual mortality risk, after adjustment for individual-level characteristics. Methods, In this prospective, multilevel study design, the vital status of National Health Interview Survey (NHIS) respondents was ascertained by linkage to the National Death Index, with additional linkage of state-level data to individuals in the NHIS. The analysis included data for 546 888 persons, with 19 379 deaths over the 8-year follow-up period. The Gini coefficient was used as the measure of income inequality. Results. Individuals living in high-income-inequality states were at increased risk of mortality (relative risk= 1.12; 95% confidence interval = 1.04, 1-19) compared with individuals living in low-income-inequality states. In stratified analyses, significant effects of state income inequality on mortality risk were found, primarily for near-poor Whites. Conclusions. State-level income inequality appears to exert a contextual effect on mortality risk, after income is adjusted for, providing further evidence that the distribution of income is important for health.