Objective: To examine the prevalence of major chronic diseases and their risk factors in different socioeconomic groups in the Australian population, in order to highlight the need for public policy initiatives to reduce socioeconomic inequalities in health. Methods: Data were provided by the Australian Bureau of Statistics (ABS) from the 2001 National Health Survey (NHS) for selected chronic diseases and associated risk factors. Conditions selected were those, which form the National Health Priority Area (NHPA) conditions (other than injury, which has not been included in this paper, with its focus on chronic disease); plus other 'serious' chronic conditions, in line with the classification developed by Mathers; and for which sufficient cases were available for analysis by socioeconomic status. Indirectly age-standardised prevalence rates were calculated by broad age group for Australia and for five groups of socioeconomic status; rate ratios were calculated to show variations in prevalence between these groups. Results: Significant socioeconomic inequalities were evident for many of the major chronic diseases; the largest was for diabetes mellitus (at ages 25 to 64 years); and for many diseases, there was also a strong, continuous socioeconomic gradient in the rates. Circulatory system diseases (in particular, hypertensive disease) and digestive system diseases also exhibited a strong differential in the 25 to 64 year age group. In the 65 years and over age group, the strongest inequalities were evident for mental and behavioural problems, diabetes (with a continuous socioeconomic gradient in rates) and respiratory system diseases. A number of risk factors for chronic diseases, namely self-reported smoking, alcohol misuse, physical inactivity and excess weight showed a striking association with socioeconomic status, in particular for people who were smokers and those who did not exercise. Conclusion: This analysis shows that the prevalence of chronic disease varies across the socioeconomic gradient for a number of specific diseases, as well as for important disease risk factors. Therefore, any policy interventions to address the impact of chronic disease, at a population level, need to take into account these socioeconomic inequalities.