Abstract Background Previous studies are inconclusive on whether poor socioeconomic conditions in the neighborhood are associated with major depressive disorder. Furthermore, conceptual models that relate neighborhood conditions to depressive disorder have not been evaluated using empirical data. In this study, we investigated whether neighborhood income is associated with major depressive episodes. We evaluated three conceptual models. Conceptual model 1: The association between neighborhood income and major depressive episodes is explained by diseases, lifestyle factors, stress and social participation. Conceptual model 2: A low individual income relative to the mean income in the neighborhood is associated with major depressive episodes. Conceptual model 3: A high income of the neighborhood buffers the effect of a low individual income on major depressive disorder. Methods We used adult baseline data from the LifeLines Cohort Study (N = 71,058) linked with data on the participants’ neighborhoods from Statistics Netherlands. The current presence of a major depressive episode was assessed using the MINI neuropsychiatric interview. The association between neighborhood income and major depressive episodes was assessed using a mixed effect logistic regression model adjusted for age, sex, marital status, education and individual (equalized) income. This regression model was sequentially adjusted for lifestyle factors, chronic diseases, stress, and social participation to evaluate conceptual model 1. To evaluate conceptual models 2 and 3, an interaction term for neighborhood income*individual income was included. Results Multivariate regression analysis showed that a low neighborhood income is associated with major depressive episodes (OR (95 % CI): 0.82 (0.73;0.93)). Adjustment for diseases, lifestyle factors, stress, and social participation attenuated this association (ORs (95 % CI): 0.90 (0.79;1.01)). Low individual income was also associated with major depressive episodes (OR (95 % CI): 0.72 (0.68;0.76)). The ...