This research examines the relationship between neighborhood physical and social disorder and incarceration history among urban drug users. A cohort of 358 African American and White urban drug users completed a clinical interview and psychological assessment that emphasized cognitive and social-behavioral HIV risk factors. The Neighborhood Inventory for Environmental Typology was used to assess indicators of physical and social disorder. After controlling for age, gender, education, and having a place to live, multivariable analyses revealed that living in a neighborhood with moderate or high levels of disorder (odds ratio [OR] = 1.63; 95% confidence interval [CI] = [1.02, 2.59]) and drinking alcohol every day or nearly every day for 3 months or more (OR = 2.03; 95% CI [1.24, 3.31]) were associated with incarceration history. Findings suggest that select characteristics of disadvantaged communities may be important determinants of incarceration vulnerability among urban substance users. Residential improvements hold promise to enhance interventions aimed to reduce incarceration.