Background: Income inequality is theorized to impact health. However, evidence among adolescents is limited. This study examined the association between income inequality and health-related school absenteeism (HRSA) in adolescents. Methods: Participants were adolescents (n = 74,501) attending secondary schools (n = 136) that participated in the 2018-2019 wave of the COMPASS study. Chronic (missing =3 days of school in the previous 4 weeks) and problematic (missing =11 days of school in the previous 4 weeks) HRSA was self-reported. Income inequality was assessed via the Gini coefficient at the census division (CD) level. Multilevel modeling was used. Results: Greater income inequality was associated with a higher likelihood of chronic and problematic HRSA (chronic: OR = 1.17, 95% CI: 1.06, 1.30; problematic: OR = 1.29, 95% CI 1.11 to 1.50). Increased predicted probabilities for Problematic HRSA were observed at greater degrees of income inequality among students who identified as either white, black, Latinx, or mixed, while protective associations were observed among students who identified as Asian or other. No associations were modified by gender. Conclusion: Income inequality demonstrated unfavorable associations with HRSA, which was modified by racial identity.