The division of production leads to the separation of production and consumption, resulting in carbon emissions transfer with trade among regions. Thus, quantifying carbon inequality caused by domestic trade is important for allocating emission-reduction tasks and improving emission-reduction efficiency. Considering domestic value chain (DVC) fragmentation in China, we use multiregional input–output tables to divide products into within-province trade products, traditional trade intermediate/final products, and DVC–related trade products. Then, we examine carbon intensity inequality (CII) under DVC fragmentation and, using Theil index to analyze the contributions of between-province economic differences, within-province trade structures, and related influencing factors to CII. Previous studies have mostly focused on issues related to global value chain fragmentation. We take the lead in exploring CII caused by DVC fragmentation, and for the first time decompose the composition of CII from the perspective of DVC fragmentation. In addition, the national CII is attempted to analyze its contribution at the provincial level for the first time, which is a new improvement and exploration of previous regional research perspectives. The empirical results show that China's CII is on an upward trend, with large changes between 2002 and 2007, and then stabilized between 2007 and 2010 due to the financial crisis, before entering a phase of rapid change after 2012. In terms of regional contribution, between-province inequality is the core to PCII, while within-province inequality is the key to CCII. In terms of province, the changes in between-province inequality are relatively stable at early period. In the middle and late stages, the temporal and spatial changes of PCII and CCII between provinces are obvious with “geographic stickiness” weakening. Specifically, the carbon transfer in the early study period is mostly concentrated in traditional trade products, and the share of carbon transfer in DVC-related trade products later rises significantly from 20.05% in 2002 to 36.32% in 2017, and the value-added transfer rises from 17.09% in 2002 to 27.65% in 2017. In terms of influencing factors, energy intensity remains an important component to CII. In addition, the uncertainties of the data and methodology used in this study are discussed and possible future research directions for expansion are elaborated. Finally, specific policy recommendations for mitigating carbon inequality are presented to inform the development of efficient carbon reduction strategies.