The inverted-U hypothesis which so influenced research on regional income inequality is obsolete and does not predict or explain the recent rise in regional inequality. We argue that the regional dynamics literature on polarization, polarization reversal and spatial restructuring offers more powerful explanations to changes in regional income inequality. In addition to the conventional approach of measuring systemic inequality, the empirical analysis in this paper emphasizes inequality variations, which put into focus the interplay between regional dynamics and regional income inequality. The findings highlight the impact of sectoral shifts and global spatial restructuring on the US regional economy, where new cores of growth and renewed growth are emerging.