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Background: We present the health inequalities analytic approach used by the Saskatoon Health Region to examine health equity. Our aim was to develop a method that will enable health regions to prioritize action on health inequalities. Methods: Data from admissions to hospital, physician billing, reportable diseases, vital statistics and childhood immunizations in the city of Saskatoon were analyzed for the years ranging from 1995 to 2011. Data were aggregated to the dissemination area level. The Pampalon deprivation index was used as the measure of socioeconomic status. We calculated annual rates per 1000 people for each outcome. Rate ratios, rate differences, area-level concentration curves and area-level concentration coefficients quantified inequality. An Inequalities Prioritization Matrix was developed to prioritize action for the outcomes showing the greatest inequality. The outcomes measured were cancer, intentional self-harm, chronic obstructive pulmonary disease, mental illness, heart disease, diabetes, injury, stroke, chlamydia, tuberculosis, gonorrhea, hepatitis C, high birth weight, low birth weight, teen abortion, teen pregnancy, infant mortality and all-cause mortality. Results: According to the Inequalities Prioritization Matrix, injuries and chronic obstructive pulmonary disease were the first and second priorities, respectively, that needed to be addressed related to inequalities in admissions to hospital. For physician billing, mental disorders and diabetes were high-priority areas. Differences in teen pregnancy and all-cause mortality were the most unequal in the vital statistics data. For communicable diseases, hepatitis C was the highest priority. Interpretation: Our findings show that health inequalities exist at the local level and that a method can be developed to prioritize action on these inequalities. Policies should consider health inequalities and adopt population-based and targeted actions to reduce inequalities. [ABSTRACT FROM AUTHOR]