Regional development becomes an important issue inboth developed and developing societies as regionalinequality evolves with time. Few analyses have beendone on regional inequalities of the former Sovietcountries such as Ukraine. This lack of research canbe explained by the socialist regional policy ofequality that was dominant during the Soviet era.During transition to the market economy inequalityhas increased entailing negative processes in thesociety. A broad goal of this study is to improveunderstanding of regional development processes incountries that are in transition from centrallyplanned to market economy such as Ukraine. Theobjectives that lead to this goal are narrowed to thefollowing: to identify inequality in regionaldevelopment of Ukraine in a dynamic time framework,to model relationships between the level of economicdevelopment and factors that stimulated development,and to analyze mechanisms of regional policy thatinfluence regional development. The results of thisstudy should be useful to those who conduct aresearch on inequality and regional developmentpolicy, or anyone who is interested in thedevelopment path of the post-Soviet countries.