Background:Racial/ethnic disparities in preterm birth (PTB) are well documented in the epidemiological literature, but little is known about the relative contribution of different social and environmental determinants of such disparities in birth outcome. Furthermore, increased focus has recently turned toward modifiable aspects of the environment, including physical characteristics, such as neighborhood air pollution, to reduce disparities in birth outcomes.Objectives:To apply decomposition methods to understand disparities in preterm birth (PTB) prevalence between births of non-Hispanic black individuals and births of non-Hispanic white individuals in California, according to individual demographics, neighborhood socioeconomic environment, and neighborhood air pollution.Methods:We used all live singleton births in California spanning 2005 to 2010 and estimated PTBs and other adverse birth outcomes for infants borne by non-Hispanic black mothers and white mothers. To compare individual-level, neighborhood-level, and air pollution [Particulate Matter, 2.5 micrometers or less () and nitrogen dioxide ()] predictors, we conducted a nonlinear extension of the Blinder–Oaxaca method to decompose racial/ethnic disparities in PTB.Results:The predicted differences in probability of PTB between black and white infants was 0.056 (95% CI: 0.054, 0.058). All included predictors explained 37.8% of the black–white disparity. Overall, individual (17.5% for PTB) and neighborhood-level variables (16.1% for PTB) explained a greater proportion of the black–white difference in birth outcomes than air pollution (5.7% for PTB).Conclusions:Our results suggest that, although the role of individual and neighborhood factors remains prevailing in explaining black–white differences in birth outcomes, the individual contribution of is comparable in magnitude to any single individual- or neighborhood-level factor. https://doi.org/10.1289/EHP490