This study examines the relationship between rainfall deficits and social and economic inequality within rural Ethiopian communities. The first set of analyses focuses on the case of a single rainfall deficit-affected community in rural southern Ethiopia, drawing upon data from qualitative interviews, focus groups, and a household survey. Results show that livestock inequality decreased at a greater rate during the drought-affected years than a preceding year with average rainfall. Non-livestock asset dynamics appeared largely disconnected from drought. These results are in part supported by a statistical analysis of the association between rainfall deficits and wealth inequality within rural communities across three regions of Ethiopia. This set of analyses draws upon the Ethiopian Demographic and Health Surveys and an agro-climatology dataset from the National Aeronautics and Space Administration. Results show that rainfall deficits were associated with decreased livestock inequality in the region of Tigray, but nonsignificant changes in Amhara and Oromiya. The association between drought and non-livestock assets was non-significant. The case study also considered the effect of rainfall shocks on other forms of inequality. Results suggest that the equalizing effect of drought on livestock ownership corresponded with growing inequalities in other outcomes. Households that sold livestock often did so from of a position of relative power within the community. Many of these households were able to use the proceeds of livestock sales to maintain food consumption and assist other households. Such assistance was often paid back in cash or labor, and implicitly increased the benefactor's access to the beneficiary's labor in the future. In contrast, less wealthy households often responded to drought-related food insecurity by engaging in wage labor, and borrowing food or money. The receipt of resources during periods of environmental stress often improved access to essential food, but came with expectations of repayment or obligations to provide future labor. These relationships and obligations may constitute sources of cumulative (dis)advantage over the long run. It may be productive to move away from a purely social determinants perspective on vulnerability to environmental change, and instead consider how social inequality and environmental shocks interact in a cyclical manner over time.