This article reviews the main policy guidelines set by the European Union (EU) for eradicating poverty and inequality in the context of its development cooperation partnerships. Drawing on the structure of the EU’s treaty, the EU’s offi cial development policies since 2005, and the related European Commission documents over the past five years, it examines the conceptions of poverty and inequality and how the EU translates them into operational diff erentiation. The scope of the diff erentiated cooperation encompasses diff erent types of developing countries, including a variety of both low-income countries (LICs) and middleincome countries (MICs). The article argues that diff erentiation poses a challenge to the EU’s internal development policy coherence. While the EU has adopted a multifaceted understanding of poverty, its conception of inequality is very narrow. In addition, the authors contend that the EU lacks clear criteria for diff erentiation in diverse country contexts in both regards.