In this article the authors study the effect of oil profit on profit distribution in Iran during 1968 through 2002. Gini coefficient in the index used for income distribution. In the present article, Jha (1999) which is as abase on cobb – Douglas function is used. Model estimation method is adopted from the discussions relating to Auto – Regressive Distributed Lag (ARDL). The results obtained from model estimation show that oil income leads to inequality in profit distribution throughout the estate as well as in city areas. However, regarding such an effect in rural areas, one cannot explicitly make a statement.