This reserach examines wealth distribution across ethnic groups in Israel and evaluates the role of labor market rewards and intergenerational transfers in producing ethnic disparities. Israel SHARE data from 2005-2006 are used in the analyses. The findings reveal considerable ethnic disparities in wealth. Wealth disparities are most pronounced when Israeli-born Jews are compared with Arabs and with immigrants from the Former Soviet Union. Further analysis suggests that wealth buildup in Israel is influenced by two major sources: income flows and inheritance. The differential impact of the two sources on wealth disparities can be best understood when considering the unique position of each ethnic group in Israeli society.