The present editorial discusses whether socioeconomic status of the individual and of the neighbourhood could be important in prevalence, treatment and prevention of psychiatric morbidity. Previous research showed that patients diagnosed with mental disorders are concentrated in socioeconomically disadvantaged areas. This could be the result of (1) an association between individual socioeconomic status and mental health, (2) an association between neighbourhood socioeconomic status and mental health, or (3) social selection. Research disentangling associations between individual and neighbourhood socioeconomic status on the one hand and mental health outcomes on the other, reported that neighbourhood socioeconomic disadvantage was associated with individual mental health over and above individual-level socioeconomic status, indicating deleterious effects for all inhabitants both poor and affluent. In conclusion, subjective mental health outcomes showed stronger evidence for an effect of neighbourhood socioeconomic status than research focussing on treated incidence. Within the group of patients, however, service use was higher in patients living in disadvantaged neighbourhoods. Social capital was identified as one of the mechanisms whereby neighbourhood socioeconomic disadvantage may become associated with observed reductions in mental health. After controlling for individual socioeconomic status, there is evidence for an association between neighbourhood socioeconomic status and objective as well as subjective mental health in adults. Evidence for such an association in young children is even stronger.