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Objectives To analyse the associations between socioeconomic status (SES), measured using occupation, and self-reported health, and to examine the contribution of various material, occupational and psychosocial factors to social inequalities in health in Europe. Methods This study was based on data from the European Quality of Life Survey (EQLS) carried out in 2003. The total sample consisted of 6038 and 6383 working men and women in 28 countries in Europe (response rates: 30.3-91.2%). Each set of potential material, occupational and psychosocial mediators included between eight and 11 variables. Statistical analysis was performed using multilevel logistic regression analysis. Results Significant social differences were observed for self-reported health, manual workers being more likely to be in poor health (OR=1.89, 95% CI 1.46 to 2.46 for men, OR=2.18, 95% CI 1.71 to 2.77 for women). Strong social gradients were found for almost all potential mediating factors, and almost all displayed significant associations with self-reported health. Social differences in health were substantially reduced after adjustment for material, occupational and psychosocial factors, with material factors playing a major role. The four strongest contributions to reducing these differences were found for material deprivation, social exclusion, financial problems and job reward. Taking all mediators into account led to an explanation of the social differences in health by 78-100% for men and women. Conclusion The association between SES and poor health may be attributed to differential distributions of several dimensions of material, occupational and psychosocial conditions across occupational groups. Interventions targeting different dimensions might result in a reduction in social inequalities in health. [ABSTRACT FROM AUTHOR]