ObjectivesFollowing the WHO 2015 policy framework, we tested the effects of older people’s intrinsic capacity and their perceptions of their neighborhood environments on mental and physical health-related quality of life (QoL) outcomes across two years. Study designParticipants (mean age = 66) were drawn from two waves of a longitudinal study of aging (n = 2910) in 2016 and 2018. Regression analyses tested the main and interaction effects of intrinsic capacity and neighborhood factors on health-related QoL at T2 (controlling for T1). Main outcome measuresIntrinsic capacity was assessed with number of chronic conditions. Neighborhood perceptions was assessed with measures of housing suitability, neighborhood satisfaction, and neighborhood social cohesion. Health-related QoL was assessed with SF12 physical and mental health component scores. ResultsPerceptions of greater neighborhood accessibility and more trust among neighbours were associated with better mental health-related QoL two years later, but not to changes in physical health-related QoL. A significant interaction between intrinsic capacity and neighborhood access to facilities on physical health-related QoL over time showed that those reporting lower neighborhood access experienced a stronger impact of intrinsic capacity on physical health-related QoL. ConclusionsThe neighborhood environment is important to the wellbeing of older people and is amenable to policy interventions. We need more work on the aspects of the immediate environment that support QoL in older age. This study points to the need for accessible facilities and cohesive neighborhoods to support health.