BACKGROUND Impact of mediating factors on the relationship between socioeconomic disadvantage and outcomes among patients with acute ischemic stroke has not been well characterized. METHODS Data on patients with acute ischemic stroke were extracted from electronic medical records, and 90‐day modified Rankin scale (mRS) scores were collected as part of a prospective stroke registry. Exact patient addresses were geocoded and characterized using Area Deprivation Index (ADI) ranks. The 90‐day modified Rankin scale scores ≥3 were categorized as poor outcomes. Logistic regression models (adjusted for treatment with intravenous tissue plasminogen activator or intraarterial therapy, sociodemographics, and comorbidities) were fitted to compute adjusted odds ratios (aORs) and 95% CIs for total effect of high ADI on poor outcomes. In‐hospital mortality (versus survived) and unfavorable (versus favorable) discharge disposition were also evaluated as outcomes. Structural equation modeling was used to report the average causal mediation effects of stroke severity (National Institutes of Health Stroke Scale [NIHSS]) and treatment (intravenous tissue plasminogen activator or intraarterial therapy). RESULTS Between May 2016 and December 2021, 13 641 patients with acute ischemic stroke (median age, 69 years; 50.1% women) were included. Among 3002 patients with functional outcomes data, a high ADI was significantly associated with poor 90‐day modified Rankin scale score (aOR, 1.16 [95% CI, 1.04–1.29]). Patients in higher ADI neighborhoods had increased odds of having higher NIHSS scores (aOR, 1.19 [95% CI, 1.07–1.32]). Likewise, a higher NIHSS score was associated with poor 90‐day modified Rankin scale score (aOR, 9.34 [95% CI, 7.64–11.5]). The effect of neighborhood disadvantage on poor 90‐day modified Rankin scale score was 59% mediated by NIHSS score (average causal mediation effects: P <0.001). NIHSS score also accounted for 93% of the pathway for unfavorable discharges. In‐hospital mortality was not associated with ADI, and treatment did not significantly mediate any outcomes. CONCLUSIONS Neighborhood disadvantage leads to unfavorable hospital discharges and worse 90‐day disability, mediated via stroke severity. Tracking social determinants of health may identify opportunities for reducing the onset of severe strokes and poor outcomes.