We report on comparative analyses of small area variation in rates of acute hospital admissions for psychiatric conditions in Greater London around the year 1998 and in New York City (NYC) in 2000. Based on a theoretical model of the factors likely to influence psychiatric admission rates, and using data from the most recent population censuses and other sources, we examine the association with area indicators designed to measure access to hospital beds, socio-economic deprivation, social fragmentation and ethnic/racial composition. We report results on admissions for men and women aged 15-64 for all psychiatric conditions (excluding self-harm), drug-related substance abuse/addiction, schizophrenia and affective disorders. The units of analysis in NYC were 165 five-digit Zip Code Areas and, in London, 760 electoral wards as defined in 1998. The analysis controls for age and sex composition and, as a proxy for access to care, spatial proximity to hospitals with psychiatric beds. Poisson regression modeling incorporating random effects was used to control for both overdispersion in the counts of admissions and for the effects of spatial autocorrelation. The results for NYC and London showed that local admission rates for all types of condition were positively and significantly associated with deprivation and the association is independent of demographic composition or 'access' to beds. In NYC, social fragmentation showed a significant association with admissions due to affective disorders and schizophrenia, and for drug dependency among females. Racial minority concentration was significantly and positively associated with admissions for schizophrenia. In London, social fragmentation was associated positively with admissions for men and women due to schizophrenia and affective disorders. The variable measuring racial/ethnic minority concentration for London wards showed a negative association with admission rates for drug dependency and for affective disorders. We discuss the interpretation of these results and the issues they raise in terms of the potential and limitations of international comparison.