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In previous research on cognitive decline among older adults, investigators have not considered the potential impact of contextual variables, such as neighborhood-level conditions. In the present investigation, the authors examined the association between 2 neighborhood-context variables—socioeconomic status and percentage of Mexican-American residents—and individual-level cognitive function over a 5-year follow-up period (1993–1998). Data were obtained from the Hispanic Established Populations for Epidemiologic Studies of the Elderly, a longitudinal study of community-dwelling older Mexican Americans (n = 3,050) residing in the southwestern United States. Individual records were linked with 1990 US Census tract data, which provided information on neighborhood characteristics. Hierarchical linear growth-curve models and hierarchical logistic models were used to examine relations between individual- and neighborhood-level variables and the rate and incidence of cognitive decline. Results showed that baseline cognitive function and rates of cognitive decline varied significantly across US Census tracts. Respondents living in economically disadvantaged neighborhoods experienced significantly faster rates of cognitive decline than those in more advantaged neighborhoods. Odds of incident cognitive decline decreased as a function of neighborhood percentage of Mexican-American residents and increased with neighborhood economic disadvantage. The authors conclude that neighborhood context is associated with late-life cognitive function and that the effects are independent of individual-level risk factors. [ABSTRACT FROM AUTHOR]