The gap between average faculty salaries at public and private institutions has been growing wider over the past 40 years, yet little is known about the nature and causes of the gap. This study uses data on more than 1,000 institutions to examine institutional average faculty salaries and how they have changed for public and private institutions. We found that the current average salary disadvantage for public institutions is primarily concentrated in research-intensive institutions and the average salary gaps between public and private research institutions have continued to increase between 2001 and 2011 even after controlling for selected factors including financial resources.