We present a critical review of research concerning the vulnerability of mental health of young people in the 10-20 year age range to neighbourhood factors that are theoretically associated with increased risk of Common Mental Disorders (CMDs). We interpreted 'neighbourhood factors' as attributes and processes in the local social and physical environment that young people inhabit, beyond the immediate household. We conducted an extensive search, and a structured method of assessment of the research papers that met our search criteria. We draw conclusions about the research evidence on this topic and identify issues needing further discussion and investigation. We focus particularly on quantitative research that aims to measure these relationships. We note that parallel to this research, a significant body of qualitative research on the geographical experiences of young people (though not specifically on their mental health) offers a rich source of background information to illuminate the statistical findings. We conclude with some reflections on the future challenges for research in this field.