Twenty-first century urbanization poses increasing challenges for mental health. Epidemiological studies have shown that mental health problems often accumulate in urban areas, compared to rural areas, and suggested possible underlying causes associated with the social and physical urban environments. Emerging work indicates complex urban effects that depend on many individual and contextual factors at the neighbourhood and country level and novel experimental work is starting to dissect potential underlying mechanisms. This review summarizes findings from epidemiology and population-based studies, neuroscience, experimental and experience-based research and illustrates how a combined approach can move the field towards an increased understanding of the urbanicity-mental health nexus.