The study focuses on the issue of gender discrimination in pay among university faculty in Russia, a country with an exceptionally high share of female faculty in higher education. Using a comprehensive and nationally representative survey of university faculty, we found that although women in academia earn considerably less than men, gender inequality among university faculty is lower than in the non-academic sector. The study shows that gender differences in pay can be mainly explained by vertical gender segregation: women are less likely to achieve senior positions in the university hierarchy, which brings a high wage premium. Another explanation is horizontal segregation, when there is a prevalence of male faculty in Moscow-based universities, which provide a considerable wage premium compared to regional ones. A decomposition of the gender wage gap shows that slightly more than half of it can be explained by observable factors, while the rest can be attributed to discrimination and unobservable characteristics. Within the unexplained part the major part can be attributed to favoritism towards men and the minor part to discrimination against women. We found some evidence that faculty in research universities, which actively implement performance-related pay, experience less gender inequality.