Relative deprivation has been hypothesized as one of the pathways accounting for the link between income inequality and health. We tested this hypothesis in a large national sample of men and women in Japan. Our survey included a probability sample of 22,871 men and 24,243 women aged 25-64, from whom information was gathered on demographic variables, household income, occupation or employment status, and self-rated health. Our measure of relative deprivation was the Yitzhaki Index, which calculates the deprivation suffered by each individual as a function of the aggregate income shortfall for each person relative to everyone else with higher incomes in that person's reference group. We modeled several alternative reference groups, including others with the same occupation, others of the same age group, and others living in the same geographic area (prefecture), as well as combinations of these. Generalized estimating equations demonstrated that higher relative deprivation was associated with worse self-rated health. Even after controlling for absolute income as well as other sociodemographic factors, the odds ratio and its 95% confidence intervals (CI) for poor health ranged from 1.09 (95% CI: 1.02-1.16) to 1.18 (95% CI: 1.11-1.26) for men and from 1.10 (95% CI: 1.04-1.16) to 1.16 (95% CI: 1.09-1.23) for women per 1 million increase in the Yitzhaki Index. As such, relative income deprivation is associated with poor self-rated health independently of absolute income, and relative deprivation may be a mechanism underlying the link between income inequality and population health.