The purpose of this study is to assess the extent of inequality in health outcomes and the distribution of health services according to health need under National Health Insurance System in Korea. For the empirical analysis, data were collected through an interview survey during one month of October, 1994. Interview were conducted with a total of 10, 875 of the employees and the self-employed selected through cluster, systematic sampling. The major findings of this research are as follows: 1. The analysis of the differentials in morbidity rates by socio-economic group showed that health inequality in the pro-higher groups existed in all self-reported morbidity indicators. 2. The findings of the conventional use measures showed that the lower socio-economic groups had more ambulatory and inpatient services than the higher groups. In contrast to the level of the medical care utilization, however, the higher socio-economic groups were more likely to use the high-quality source of care in terms of their treatment place compared to the lower groups. 3. By using the need-based use measures, the results were different from each use-disability ration indicator. Using the use-disability ration measured by physician visits per 100 restricted-activity days in the population, it was found that there was no evidence favoring the higher socio-economic groups. In contrast, the use-disability ration based on physician visits per a chronic patient in one year displayed that there was remarkable relative difference by income group as well as the evidence of the pro-higher income groups. 4. The results of logistic regression analysis and two-stage estimation method indicated that although the utilization is significantly affected by type and duration of insurance coverage, the use or nonuse of service and the volume of physician care consumed is determined by health need and demographic characteristics rater than economic status. In sum, these findings suggest that physician service is equitably distributed according to health need under national health insurance system in Korea. As there were some evidences of inequality including the differential in physician visits of chronic patients by income group, however, the government should strengthen the activities to guarantee the equity of health services utilization.