This study examines two theses concerning the relationship between individual health status and the socio-economic composition of the neighbourhoods in which the individual lives. In the first variant, the claim is that more unequal communities will not generate the social & capital cohesion that makes for healthy populations, irrespective of whether these communities are rich or poor. At the individual level, the implication is that individuals who live in high inequality neighbourhoods will tend to have poorer health irrespective of their own income levels. The second variant involves testing two competing claims about the health advantages or disadvantages of sharing neighbourhoods with more or less affluent neighbours. One claim is that sharing neighbourhoods with more affluent families may have negative effects on the health of the less affluent if residential proximity generates invidious social comparisons or competition for scarce resources. The second is that the less affluent may derive positive externalities by living with more affluent neighbours because of richer institutional resources and/or learning effects. The theses are tested using a combination of individual micro data from the National Population Health Survey, 1996-97, with neighbourhood-level characteristics estimated from the 1996 Census of Canada 20% sample micro data file.