There is evidence that health is determined by macro-level factors as well as by individual risk factors. Using data from the Whitehall II study we consider area-level determinants of health and ask two related questions. Firstly, are health differences between areas explained by the individual risk profiles of residents in those areas? Secondly, since poorer people tend to live in poorer places, are individual socio-economic effects on health explained by where people live? The demographic characteristics of residents, level of deprivation in the area, housing and neighbourhood quality and social integration were independently associated with health but did not fully explain differences between areas. Although there was considerable residential polarisation, area deprivation did not explain why lower status participants had poorer health.