Aspects of the environment in which one lives are increasingly being recognized as major contributors to health, yet few empirical studies have focused on mental health. Therefore, we sought to determine if neighborhood characteristics were associated with mental health outcomes among 1408 African-American (59.3%) and white (40.7%) adults living in a socio-economically homogeneous, racially integrated, urban community in Baltimore, MD. Among African Americans and whites, the perception of severe problems in the community was associated with higher levels of stress (approximately 1.8 units higher), anxiety (approximately 1.8 units higher), and depression (OR= approximately 2.0) compared to those who perceived no or few problems (all p<0.05). Community cohesion, the perception that people generally work together, was associated with better mental health among whites only. These findings give further insight into the complex environment of inner-city communities.