Concern over terrorist releases of harmful material has generated interest in short-range air-borne dispersion in urban areas. Here, we review the important fluid dynamical processes that control dispersion in the first kilometre, the neighbourhood scale, when much of the material remains within the urban canopy. Dispersion is then controlled by turbulent mixing and mean flow transport through the network of streets. We consider mixing and transport in a long straight street, street intersections and then a network of streets connected by intersections. The mixing and transport in these systems are illustrated with results from recent fine-resolution numerical simulations and laboratory models, which then inform simpler scaling estimates and modelling schemes. Finally, we make some tentative steps to pull the process studies together to begin to understand results from full-scale observations. In particular, it is shown that the positions of 'shear layers' and 'dividing streamlines' largely control the patterns of mixing and transport. It is also shown that neighbourhood-scale dispersion follows one scaling in the near field and another in the far field after passage through many intersections. The challenge for the future is to bring these threads together into a coherent mathematical model.