The practice of dowry is widespread in India and refers to the payment of cash/gifts by the bride's family to the bridegroom's family before marriage. Though prohibited by law, dowry is widely practised, and often contributes to severe injuries and even death of young brides. This study examined the prevalence and risk factors for dowry demand and dowry harassment and its psychosocial correlates across different social strata in India, and also by husband and mother-in-law characteristics. In a cross-sectional survey of 9938 women in rural, urban and urban non-slum sites across India conducted in 1998–99, dowry demand was found to be significantly higher (p<0.001) in the urban non-slum and rural areas (26% and 23% respectively) than in urban slum areas (18%). Overall, 17% of groom's families were not satisfied with the dowry, this being higher in rural areas (21%) than in urban slum and non-slum areas (about 14% in both). The overall prevalence of dowry harassment among this group of women was 13.3%. Mothers-in-law who had themselves experienced dowry demand were 14 (95% CI 5.0–40.4) and 5 (95% CI 1.3–18.9) times more likely to demand and harass daughters-in-law over dowry, respectively. Another significant risk factor for dowry-related harassment was mother-in law's status in the family. Interventions related to modifiable risk factors, such as increased social support at the community level, should help reduce dowry harassment.