Objectives: To determine the relationship between neighborhood-level socioeconomic characteristics, life-space mobility, and incident falls in community-dwelling older adults. Design: Prospective, observational cohort study with a baseline in-home assessment and 6-month telephone follow-up. Setting: Central Alabama. Participants: Community-dwelling adults aged 65 and older recruited from a random sample of Medicare beneficiaries (N = 1,000). Measurements: Neighborhood disadvantage was measured using a composite index derived from baseline neighborhood-level residential census tract socioeconomic variables. Data on individual-level socioeconomic characteristics, clinical variables, and life-space collected at baseline were included as covariates in a multivariate model using generalized estimating equations to assess the association with incident falls in the 6 months after baseline. Results: Of the 940 participants who completed baseline and follow-up assessments, 126 (13%) reported one or more new falls in the 6 months after baseline. There was an independent nonlinear association between neighborhood disadvantage (according to increasing quartiles of disadvantage) and incident falls after adjusting for confounders: The lowest quartile served as reference; 2nd quartile odds ratio (OR) = 2.4, 95% confidence interval (CI) = 1.2–4.6; 3rd quartile OR = 1.9, 95% CI = 1.0–3.7; 4th quartile OR = 3.2, 95% CI = 1.7–6.0. Each 10-point decrement in life-space (OR = 1.2, 95% CI = 1.0–1.3) was associated with a higher risk of falls. Conclusion: Greater neighborhood disadvantage was associated with greater risk of falls. Life-space also contributes separately to fall risk. Community-dwelling older adults in disadvantaged neighborhoods, particularly those with limited mobility, may benefit from a more-rigorous assessment of their fall risk by healthcare providers. Neighborhood level socioeconomic characteristics should also be an important consideration when identifying vulnerable populations that may benefit the most from fall prevention programs.