AIMS: Self-reported health has been widely used in studies of health inequalities in many industrialized countries, but there is still little information on their distribution within populations in countries in Central and Eastern Europe (CEE). There is growing evidence that, since the political transition at the end of the 1980s, income and health inequalities have widened considerably throughout CEE. This paper examined self-perceived health in Bulgaria in relation to financial status (measured by income and self-assessed financial status) after adjustment for other potential explanatory variables. METHODS: Data were derived from a national representative survey of the population of Bulgaria aged over 18, in 1997. Respondents were asked "How would you describe your own health status over the past 12 months on the whole?" with answers "good", "rather good", "rather poor", and "poor". Responses were assessed in relation to a variety of measures including income, education, marital status, and self-perceived financial hardship. RESULTS: As expected, the prevalence of poor/rather poor health increases steeply with age. Those with only primary education are more likely to be in poor/rather poor health than those with secondary or higher education. Self-assessed financial status is a much better predictor of health than is income, with the relationship especially strong among women. There was no association with marital status or urban vs. rural dwelling. CONCLUSIONS: The survey found marked inequalities in self-reported health in Bulgaria. Some of its determinants, such as age and education, are comparable to those seen in the West. Self-reported health is particularly associated with self-perceived financial hardship, a proxy for material deprivation that is sensitive to informal economic exchanges. An accelerated pace of economic and social reforms at the end of the 1990s means that the health divisions in Bulgaria are likely to increase in the short term.