In recent years there has been an explosion of interest in neighborhood health effects. Most existing work has relied on secondary data analyses and has used administrative areas and aggregate census data to characterize neighborhoods. Important questions remain regarding whether the associations reported by these studies reflect causal processes. This paper reviews the major limitations of existing work and discusses areas for future development including: (1) definition and measurement of area or ecologic attributes; (2) consideration of spatial scale; (3) cumulative exposures and lagged effects; (4) the complementary nature of observational, quasi-experimental, and experimental evidence. As is usually the case with complex research questions, consensus regarding the presence and magnitude of neighborhood health effects will emerge from the work of multiple disciplines, often with diverse methodological approaches, each with its strengths and its limitations. Partnership across disciplines, as well as among health researchers, communities, urban planners, and policy experts will be key.