Evidence suggests that African American youths initiate sexual activity at earlier ages than do European American or Latino youths. Using data from a multilevel study in Chicago, we developed and tested a neighborhood-based model of the timing of first adolescent intercourse that emphasizes the impact of neighborhood structural disadvantage and collective efficacy on early sexual activity (at ages 11 to 16). In turn, we explored the extent to which neighborhood factors account for racial differences in the timing of first intercourse. The findings indicate that demographic background, family processes, peer influences, and developmental risk factors account for about 30% of the baseline increased likelihood of early sexual onset for African American youths compared with European American youths. However, a significant residual racial difference remained even after we considered a host of micro-level factors. Neighborhood-level concentrated poverty largely explained this residual racial difference. Collective efficacy also independently contributed to the delay of sexual onset. No significant baseline difference in age of sexual initiation was found between Latino and European American youths.