We evaluated the association of neighborhood types and externalizing behavior problems in 99 predominately African-American urban children (M = 10.7 years), and the extent to which qualities of the family environment mediated or moderated these associations. Three distinct neighborhood types were identified using cluster analysis of census and crime data. Results showed that children living in very poor neighborhoods with moderate crime levels had more behavior problems than children living in relatively low crime, low poverty areas. Family stress mediated the association between neighborhood type and behavior problems. Family cohesion moderated the association of neighborhood type and adjustment: children living in the most impoverished neighborhoods with high levels of family cohesion demonstrated fewer behavior problems relative to their peers in low-cohesive households in the same area, and similar levels of behavior problems relative to children in highly cohesive homes in low crime, low poverty areas.