Research has established that those with higher social status have better health. Less is known about whether this relationship differs cross-nationally and whether it operates similarly across different institutional arrangements. To examine the relationship between stratification and health, two Western, industrialized societies at opposite ends of an equal/unequal continuum are compared: the United States and Iceland. Using data from the 1998 General Social Survey and the 1998 Health and Living Standards of Adult Icelanders survey, I draw from two theoretical perspectives. First, I explore the notion of fundamental causes of disease by examining whether stratification has similar effects on health. Second, I examine whether the organization of welfare states affects this relationship. The results show that education, employment, and relative poverty have similar effects on health in both nations, thus supporting the notion of a fundamental cause. However in Iceland relative affluence has a weaker relationship with health. Further, being a parent, regardless of marital status, has a stronger positive relationship with good health in Iceland. Welfare state intervention may be most successful in equalizing health outcomes by supporting families and by removing advantages traditionally accumulated by the wealthy in capitalist societies.