Using data from the 1995 Detroit Area Study (N = 1106) in conjunction with tract-level data from the 1990 census, this paper evaluates the relationship between residential stability and physical health among black and white adults. Results suggest that neighborhood-level variation in health is primarily mediated by key sociodemographic characteristics of individuals (e.g., age, race, and socioeconomic status). However, a significant portion of health differentials across neighborhoods is due to disparate stress levels across neighborhoods. Further, high levels of neighborhood stability provide an important buffer to the otherwise deleterious effects of increased stress levels on adults' overall health.