The distribution of renewable freshwater resources between countries is highly unequal and 80% of humanity lives in regions where water security is threatened. The transfer of agricultural and industrial products to areas where water is limited through global trade may have potential for redressing water imbalances. These transfers represent ‘virtual water’ used in commodity production. We evaluated the current water-use inequality between countries and the potential of virtual water transfers to equalize water use among nations using multiple statistical measures of inequality. Overall, the actual use of renewable water resources is relatively equal even though the physical distribution of renewable water resources is highly unequal. Most inequality (76%) in water use is due to agricultural production and can be attributed to climate and arable land availability, not social development status. Virtual water use is highly unequal and is almost completely explained by social development status. Virtual water transfer is unlikely to increase water-use equality primarily because agricultural water use dominates national water needs and cannot be completely compensated by virtual water transfers.