Objective: To examine whether adolescents' exposure to neighbourhood social capital, which is defined as levels of trust, cohesion and cooperation, reduces socio-economic differences in physical and psychological health outcomes., Methods: Survey data were collected from the 9717 Canadian youths in grades 6 to 10 participating in the 2006 Health Behaviour of School-aged Children study. Data analyses tested interaction effects of socio-economic status (SES) and social capital on five outcomes: psychological symptoms, somatic symptoms, injuries, fighting and life satisfaction., Results: SES effects on the five health outcomes varied depending on the level of exposure to neighbourhood social capital. High levels of social capital reduced or eliminated SES differences in health. However, in areas of high social capital, more affluent children reported slightly more somatic symptoms, injuries and fighting than less affluent children., Conclusion: Reduction of health inequalities in children and youth is a priority for public policy. Our results suggest that building social capital in neighbourhoods is one avenue for reducing socio-economic disparities in children's physical and psychological health. However, the findings suggest that there might be a downside to social capital in that it appears to reverse socio-economic differences in some outcomes.