We examined associations, in terms of relative and population-attributable risks, between shared social environment at the neighbourhood level and (1) treated incidence of non-psychotic, non-organic disorders, and (2) subsequent level of service consumption. The multilevel analysis used linked records of all individuals in contact for the first time with any catchment area mental health service for non-psychotic, non-organic disorder over various specified time periods between 1981 and 1995. Socioeconomic indicators of 36 neighbourhoods in the city of Maastricht yielded a multivariately defined neighbourhood deprivation score. There were significant linear trends in the association between level of deprivation and treated incidence, especially in the population under 35 years of age (adjusted rate ratio for linear trend 1.17, 95% confident interval 1.11-1.23), who constituted around half of the patient population. The fraction of the incidence of psychiatric disorder attributable to deprivation was 17.8%. Multilevel analyses of rates of a second cohort, with cases divided according to level of service use over a standardised follow-up of 5 years after first contact with psychiatric services, revealed that the effect of deprivation scores on rates declined with intensity of out-patient service use, but increased with level of in-patient use. Up to 50% of in-patient episodes in this group could be attributed to neighbourhood level of deprivation. The increase in risk conferred by neighbourhood deprivation remained after adjustment for the individual-level equivalent. The findings therefore suggest that elements in the shared social environment influence both incidence and severity of non-psychotic, non-organic disorders, over and above any individual-level effect.