The post-socialist transition processes in Serbia stepped up the existing disparities in development between the regions as well as between the municipalities. In the attempt to contribute to the EU and national knowledge on this topic, this paper focuses on interrelation between migration and development inequalities in Serbia in terms of negative natural increase, traditional emigration and small scale immigration, which challenge the balanced distribution of Serbian population and affect social change. The objective of the paper is to explore the interaction between migration and inequalities in transition economy of Serbia and to identify the underlying determinants. The indicators used in the regression analysis are the net migration rate for the inter-census period 2002-2011 and the set of demographic, socio-economic and geographic quantitative indicators. The findings reveal the interaction of migration and level of development in Serbia suggesting the importance of geographic location besides the socio-economic factors .