Studies examining the effects of neighbourhood characteristics have reported what has been called a 'group density' effect on health, such that members of low status minority communities living in an area with a higher proportion of their own racial or ethnic group tend to have better health than those who live in areas with a lower proportion. In this paper we survey published research on ethnic group density and health with the aim of stimulating further research. We situate the research question in the context of contemporary social epidemiology and provide a narrative review of studies of ethnic density and health. We go on to discuss processes which may underlie ethnic density effects, and highlight gaps in the literature and opportunities for further research. Although first recognised in studies of mental illness, 'group density' effects on physical health have been shown more recently. Generally, given individual material circumstances, living in a poorer area is associated with worse health. Members of ethnic minorities who live in areas where there are few like themselves are likely to be materially better off, and living in better neighbourhoods, than those who live in areas with a higher concentration. However, through the eyes of the majority community, they may be made more aware of belonging to a low status minority group, and the psychosocial effects of stigma may offset any advantage. If the psychological effects of stigma are sometimes powerful enough to override material advantage, this may have implications for our understanding of how low social status affects health more generally. As well as highlighting the importance of low social status, cultural isolation and social support to health and quality of life, this paper shows how an understanding of group density effects also has something to offer to our understanding of issues of prejudice, segregation, assimilation and integration in diverse societies.