This chapter identifies "context minimization error" as the tendency to ignore the impact of enduring neighborhood and community contexts on human behavior. The error has adverse consequences for understanding psychological processes and efforts at social change. The chapter describes a series of theoretical models of how neighborhoods and community settings are associated with various aspects of human welfare and reviews evidence of associations of contexts with health, psychological distress, risky behaviors, psychological attitudes, and child development. It suggests that many psychological processes may play out differently in different contexts and that contextual factors interact with sociocultural characteristics of individuals in predicting outcomes. People, in turn, can shape community contexts. A more sophisticated understanding of the effects of contexts depends on more sophisticated approaches to assessing them.