Effects of income inequality on health and other social systems have been a subject of considerable debate, but only a few studies have used multilevel models to evaluate these relationships. The main objectives of the study were to (1) Evaluate the relationships among neighborhood income inequality, social support and birth outcomes (low birth weight, and preterm delivery) and (2) Assess variations in racial disparities in birth outcomes across neighborhood contexts of income distribution and maternal social support. We evaluated these relationships by using South Carolina Pregnancy Risk Assessment and Monitoring System (PRAMS) survey for 2000-2003 geocoded to 2000 US Census data for South Carolina. Multilevel analysis was used to simultaneously evaluate the association between income inequality (measured as Gini), maternal social relationships and birth outcomes (low birth weight and preterm delivery). The results showed residence in neighborhoods with medium levels of income inequality was independently associated with low birth weight (OR: 2.00; 95% CI 1.14-3.26), but not preterm birth; low social support was an independent risk for low birth weight or preterm births. The evidence suggests that non-Hispanic black mothers were at increased risks of low birth weight or preterm birth primarily due to greater exposures of neighborhood deprivations associated with low income and reduced social support and modified by unequal income distribution.