Objective: The impact of the wider social environment, such as neighbourhood characteristics, has not been examined in the development of borderline personality disorder. This study aimed to determine whether the treated incidence rate of full-threshold borderline personality disorder and sub-threshold borderline personality disorder, collectively termed borderline personality pathology, was associated with the specific neighbourhood characteristics of social deprivation and social fragmentation. Method: This study included young people, aged 15–24 years, who attended Orygen’s Helping Young People Early programme, a specialist early intervention service for young people with borderline personality pathology, from 1 August 2000–1 February 2008. Diagnoses were confirmed using the Structured Clinical Interview for DSM-IV Personality Disorders, and census data from 2006 were used to determine the at-risk population and to obtain measures of social deprivation and fragmentation. Results: The study included 282 young people, of these 78.0% ( n = 220) were female and the mean age was 18.3 years (SD = ±2.7). A total of 42.9% ( n = 121) met criteria for full-threshold borderline personality disorder, and 57.1% ( n = 161) had sub-threshold borderline personality disorder, defined as having three or four of the nine Diagnostic and Statistical Manual of Mental Disorders (4th ed.; DSM-IV) borderline personality disorder criteria. There was more than a sixfold increase in the treated incidence rate of borderline personality pathology in the neighbourhoods of above average deprivation (Quartile 3) (incidence rate ratio = 6.45, 95% confidence interval: [4.62, 8.98], p < 0.001), and this was consistent in the borderline personality disorder sub-groups. This association was also present in the most socially deprived neighbourhood (Quartile 4) (incidence rate ratio = 1.63, 95% confidence interval: [1.10, 2.44]), however, only for those with sub-threshold borderline personality disorder. The treated incidence of borderline personality pathology increased incrementally with the level of social fragmentation (Quartile 3: incidence rate ratio = 1.93, 95% confidence interval: [1.37, 2.72], Quartile 4: incidence rate ratio = 2.38, 95% confidence interval: [1.77, 3.21]). Conclusion: Borderline personality pathology has a higher treated incidence in the more socially deprived and fragmented neighbourhoods. These findings have implications for funding and location of clinical services for young people with borderline personality pathology. Prospective, longitudinal studies should examine neighbourhood characteristics as potential aetiological factors for borderline personality pathology.