This study investigates, statistically and econometrically, the income level, income inequality, education inequality, and the relationship between education and income of different social groups, on the basis of the Chinese Urban Household Survey conducted in 2005, the Gini coefficient and the quartile regression method. Research findings indicate that income inequality in China shows a significantly increasing trend since the beginning of the 1990s, which is attributed to the lowest income groups. Additionally, it is seen that the higher the level of education in a group, the smaller the income gap within it. As a result, the rate of returns on education for the "group with weaker ability to earn" is higher than that for the "group with stronger ability to earn".