Research conducted over the past decade has increasingly focused on health inequality. The goals of improving the health of a population are now often expressed as the increase in the average level of health and the decrease in health inequality as clearly specified in the Healthy People 2010 and the World Health Report 2000. Using a nationally representative sample of the 1989 and 1998 waves of the Japanese Comprehensive Survey of Living Conditions of the People on Health and Welfare (CSLC), this research examines the average health-related quality of life (HRQL), its distribution, and its distribution by income share. This study departs from previous health inequality analyses in the following two ways: (1) construction of a measure of HRQL in the CSLC and its application to health inequality analysis, and (2) inclusion of the dead in health inequality analysis using a cross-sectional survey. This study found that between 1989 and 1998 the average HRQL in Japan slightly reduced (0.005 reduction), its inequality by income slightly reduced (0.002 reduction in the difference between the top 20% and bottom 20% income share groups), and its inequality measured by the Gini coefficient slightly increased (0.002 increase). Women's HRQL was almost always lower than men's, except in earlier ages younger than 10 years old. HRQL was more unequally distributed among women than men and in older ages. This analysis shows that the success in the improvement in the length of life in Japan did not always coincide with the improvement in HRQL and provides a basis for the future population health research.