This paper explores the dynamics between poverty and exclusion; neighbourhood, and health and well being by considering the role of social networks and social capital in the social processes involved. It is based on qualitative research taking two deprived areas as exemplary case studies, and involving depth interviews with residents. Neighbourhood influences on networks and social capital were explored, network typologies developed reflecting structural and cultural aspects of individual's networks, and pathways implicated in health effects considered. The complexity of social capital is addressed. The role of three factors in influencing social networks and social capital are demonstrated: neighbourhood characteristics and perceptions; poverty and social exclusion, and social consciousness. Perceptions of inequality could be a source of social capital as well as demoralisation. Different network structures-dense and weak, homogeneous and heterogeneous- were involved in the creation of social capital and had implications for well being. Coping, enjoyment of life and hope are identified as benefits. Although participation in organisations was confirmed as beneficial, it is suggested that today's heterogeneous neighbourhoods also require regenerated local work opportunities to develop bridging ties necessary for the genesis of inclusive social capital and better health. Despite the capacity of social capital to buffer its harsher effects, the concept is not wholly adequate for explaining the deleterious effects of poverty on health and well being.