Many studies have demonstrated a relationship between income inequality and poor health, but how does income inequality impact health? One possible explanation is that greater income inequality undermines social capital (social cohesion, civic engagement, and mutual trust in a community). We conducted path analyses of the relationship between income inequality, poverty, and teen birth rate, testing for the mediating effect of social capital in 39 US states. Birth rate was affected by both poverty and income inequality, though income inequality appeared to affect teen birth rate primarily through its impact on social capital.