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While children generally prefer equal distributions of resources, we know little about the contextual and individual variability in these preferences. The present work examined experimental manipulations and associations between individual differences in empathy and parental teaching of "just world beliefs", and children's perceptions of, and reactions to, unequal distributions. Children (aged 5–8, N = 96) watched videos of two puppets receiving unequal resources in varying contexts: distribution by one or multiple individuals, crossed with taking the perspective of the advantaged or disadvantaged puppet. Age was positively associated with perceived unfairness. Behavioural reactions to distributions were associated with individual and contextual factors: Greater cognitive empathy and lower teaching of just world beliefs were associated with increased rectification, and children with greater affective empathy favoured the disadvantaged puppet, but these relations only emerged in certain contexts. Findings provide guidance for interventions aimed at promoting morality, suggesting emphasis on behavioural responses to inequality and empathy-training. • In 5–8-year-olds, older children rated inequality as more unfair and rectified more. • Cognitive empathy related to higher resource allocation to disadvantaged recipient. • Higher taught BJW related to lower resource allocation to disadvantaged recipient. • Children high in affective empathy favoured disadvantaged recipient. • Moral development programs should focus on behaviours and empathy-training. [ABSTRACT FROM AUTHOR]