Why does this CSS margin-top style not work?

Solutions:

1. Set padding-top: 1px; to #outer

2. Set border-top: 1px solid transparent; to #outer

3. Set float: left; to either #outer or #inner

4. Set display: inline-block; to either #outer or #inner

5. Set overflow: auto; (or any value other than visible) to #outer.

Why does this CSS margin-top style not work?

You're actually seeing the top margin of the #inner element collapse into the top edge of the #outer element, leaving only the #outer margin intact (albeit not shown in your images). The top edges of both boxes are flush against each other because their margins are equal.

Here are the relevant points from the W3C spec:

8.3.1 Collapsing margins
In CSS, the adjoining margins of two or more boxes (which might or might not be siblings) can combine to form a single margin. Margins that combine this way are said to collapse, and the resulting combined margin is called a collapsed margin.

Adjoining vertical margins collapse [...]

Two margins are adjoining if and only if:

- both belong to in-flow block-level boxes that participate in the same block formatting context
- no line boxes, no clearance, no padding and no border separate them
- both belong to vertically-adjacent box edges, i.e. form one of the following pairs:
-- top margin of a box and top margin of its first in-flow child

The reason why doing any of the following prevents the margin from collapsing:

- Floating either of your div elements
- Making either of your div elements inline blocks
- Setting overflow of #outer to auto (or any value other than visible)

Is because:

- Margins between a floated box and any other box do not collapse (not even between a float and its in-flow children).
- Margins of elements that establish new block formatting contexts (such as floats and elements with 'overflow' other than 'visible') do not collapse with their in-flow children.
- Margins of inline-block boxes do not collapse (not even with their in-flow children).

The left and right margins behave as you expect because:

Horizontal margins never collapse.

Reference:

http://www.w3.org/TR/CSS21/box.html#collapsing-margins

http://stackoverflow.com/questions/9519841/why-does-this-css-margin-top-style-not-work