The recent discovery that faint gamma-ray bursts are stretched in time
relative to bright ones has been interpreted as support for cosmologi
cal distances: faint bursts have their durations redshifted relative t
o bright ones. It was pointed out, however, that the relative time str
etching can also be produced by an intrinsic correlation between durat
ion and luminosity of gamma-ray bursts in a nearby, bounded distributi
on. While both models can explain the average amount of time stretchin
g, we find a difference between them in the way the duration distribut
ion of faint bursts deviates from that of bright ones, assuming the lu
minosity function of gamma-ray bursts is independent of distance. This
allows us to distinguish between these two broad classes of model on
the basis of the duration distributions of gamma-ray bursts, leading p
erhaps to an unambiguous determination of the distance scale of gamma-
ray bursts. We apply our proposed test to the second BATSE catalog and
conclude, with some caution, that the data favor a cosmological inter
pretation of the time dilation.