The research discusses different approaches, systems of indicators and techniques for studying of socio-economic development of territorial units. The aim was analysis of their applicability for measurement of inequalities at regional and local level. The tasks were a critical literature review of used approaches in high economic development countries and choice and adaptation of a methodology according the set of statistical data published by the National Statistical Institute of Bulgaria. The advantages and disadvantages of different approaches have been described and the most adequate of them for studying of regional and local socio-economic inequalities has been identified. A set of indicators for evaluating and ranking of territorial units in Bulgaria has been defined. A complex composite index for evaluation of regional and local socio-economic inequalities has been design. The conclusion of the research presents main possible areas for applying of the methodology and for using the index as a tool of regional policy in Bulgaria.