In this paper, we examine recent research in the area of neighborhood effects on children’s development. We begin by reviewing the literature on the mechanisms through which neighborhoods may influence child development. Then we consider four issues which are fundamental to neighborhood effects research: (1) the definition of “neighborhood,” (2) which aspects of neighborhood environments are important and how they should be measured, (3) neighborhood selection, and (4) children’s residential mobility. Next, we assess recent empirical work on neighborhood effects. Recent reviews by Sampson et al. (2002), Ginter et al. (2000), Duncan and Raudenbush (1999, 2000), and Leventhal and Brooks-Gunn (2000) catalog studies since 1990 and provide thorough reviews of their results. Rather than duplicate their efforts, we briefly summarize and compare their conclusions and then focus on the results of selected studies which provide novel approaches or insights. The final section of the paper summarizes the current state of knowledge about poor neighborhoods and their role in the intergenerational transmission of poverty.