This paper is part of a wider project to analyze the impacts of socioeconomic development on regional inequality in Brazil. In this analysis, it aims to highlight the important role of regional disparities on wage inequality in Brazil. Results are based on inequality indicators, spatial data analysis and on an econometric model to identify elasticity coefficients and the discriminatory power of labor market and economic characteristics on wage differences between municipalities. Overall, results stress the high level of wage inequality between and within municipalities and the relevant contribution of regional factors to the extreme wage inequality in Brazil. Results also suggest that, if spatial autocorrelation is not considered, inequality analyses can be subject to significant source of biases.