The composition of regional economic differential was analyzed to elucidate the development mechanism of regional economy. That composition was to be grasped from the four following facts: the regional income differential enlarged in the 1980`s. The main factor of income differential is the labor productivity differential. The income differential has been enlarging since a high working rate supporting the regional income started to break. Since 1975, the regional labor productivity differential has been enlarging in all the industries. The industries to which the enlargement of labor productivity differential was attributable in all industries were the manufacturing industry, wholesale and retail trade, and financial and insurance business. In those industries, the correlation of indirect department charge has been gradually heightening with the labor productivity, which is prescribed by the role division among regions. Mostly depending upon the final demand in the Kanto Region, the production in all regions strongly showed the foregoing trend in 1975 through 1985. The ability of connecting the final demand inside and outside the region with the production inside it is positively correlative with its labor productivity. 45 refs., 24 figs., 8 tabs.