BackgroundAetiological mechanisms underlying ethnic density associations with psychosis remain unclear.AimsTo assess potential mechanisms underlying the observation that minority ethnic groups experience an increased risk of psychosis when living in neighbourhoods of lower own-group density.MethodMultilevel analysis of nationally representative community-level data (from the Ethnic Minorities Psychiatric Illness Rates in the Community survey), which included the main minority ethnic groups living in England, and a White British group. Structured instruments assessed discrimination, chronic strains and social support. The Psychosis Screening Questionnaire ascertained psychotic experiences.ResultsFor every ten percentage point reduction in own-group density, the relative odds of reporting psychotic experiences increased 1.07 times (95% CI 1.01–1.14, P = 0.03 (trend)) for the total minority ethnic sample. In general, people living in areas of lower own-group density experienced greater social adversity that was in turn associated with reporting psychotic experiences.ConclusionsPeople resident in neighbourhoods of higher own-group density experience ‘buffering’ effects from the social risk factors for psychosis.