Abstract Purpose In Finland, prevalence of schizophrenia is higher in the eastern and northern regions and co-occurs with the distribution of schizophrenia polygenic risk scores. Both genetic and environmental factors have been hypothesized to contribute to this variation. We aimed to examine the prevalence of psychotic and other mental disorders by region and degree of urbanicity, and the impacts of socio-economic adjustments on these associations. Methods Nationwide population registers from 2011 to 2017 and healthcare registers from 1975 to 2017. We used 19 administrative and three aggregate regions based on the distribution of schizophrenia polygenic risk scores, and a seven-level urban–rural classification. Prevalence ratios (PRs) were calculated by Poisson regression models and adjusted for gender, age, and calendar year (basic adjustments), and Finnish origin, residential history, urbanicity, household income, economic activity, and physical comorbidity (additional adjustments) on an individual level. Average marginal effects were used to visualize interaction effects between region and urbanicity. Results A total of 5,898,180 individuals were observed. All mental disorders were slightly more prevalent (PR 1.03 [95% CI, 1.02–1.03]), and psychotic disorders (1.11 [1.10–1.12]) and schizophrenia (1.19 [1.17–1.21]) considerably more prevalent in eastern and northern than in western coastal regions. After the additional adjustments, however, the PRs were 0.95 (0.95–0.96), 1.00 (0.99–1.01), and 1.03 (1.02–1.04), respectively. Urban residence was associated with increased prevalence of psychotic disorders across all regions (adjusted PR 1.21 [1.20–1.22]). Conclusion After adjusting for socioeconomic and sociodemographic factors, the within-country distribution of mental disorders no longer followed the traditional east–west gradient. Urban–rural differences, on the other hand, persisted after the adjustments.