In this chapter, I introduce the concept of intra-industry trade, discuss measurement issues, and trace its rise in the postwar period. Next, I present descriptive statistics on sector- and country-level patterns in intra-industry trade, demonstrating that it tends to occur most intensively among differentiable manufactured goods and among developed economies that specialize in the production of these goods. Third, I discuss the economic rationale for intra-industry trade, drawing on the work of economists who pioneered new trade theory by explaining why countries with similar factor endowments would trade for similar goods. Fourth, I discuss the distributional effects of intra-industry trade and the contributions of new–new trade theory to the crucial point that intra-industry trade causes resources to reallocate within industries, rather than across industries. I present an extended example of these effects through discussing the effects of trade liberalization between Canada, Mexico, and the US.