Several lines of evidence suggest that individualsliving in inner cities of industrialized countries suffer from an increasedburden of mental distress, and this may be specifically pronounced amongminorities. We investigated individual levels of mental distress in individualswith and without minority statues in an inner city district of Berlin. We foundassociations with poverty in the neighbourhood (as measured by the percentageof inhabitants receiving public welfare) above and beyond the effects of localethnic composition and individual differences in income and education. Wefurthermore observed that this effect of local poverty on mental health is morepronounced in subjects with versus without minority Status. Our observationssuggest that the high level of mental distress in subjects with minority statusliving in inner cities is associated with economic effects within the local neighbourhood, beyond the effects of individual resources, emphasizing the need for targetedinterventions.