Objectives: Our aim was to answer the following questions: (1) Can mental health variance be partitioned to individual and higher levels (e.g., neighborhood and district); (2) How much (as a percentage) do individual-level determinants explain the variability of mental health at the individual-level; and (3) How much do determinants at the neighborhood- or district-level explain the variability of mental health at the neighborhood- or district-level? Methods: We used raw data from the second round of the Urban Health Equity Assessment and Response Tool in Tehran (in 2012-2013, n=34 700 samples nested in 368 neighborhoods nested in 22 districts) and the results of the official report of Tehran’s Center of Studies and Planning (in 2012-2013, n=22 districts). Multilevel linear regression models were used to answer the study questions. Results: Approximately 40% of Tehran residents provided responses suggestive of having mental health disorders (30-52%). According to estimates of residual variance, 7% of mental health variance was determined to be at the neighborhood-level and 93% at the individual-level. Approximately 21% of mental health variance at the individual-level and 49% of the remaining mental health variance at the neighborhood-level were determined by determinants at the individual-level and neighborhood-level, respectively. Conclusions If we want to make the most effective decisions about the determinants of mental health, in addition to considering the therapeutic perspective, we should have a systemic or contextual view of the determinants of mental health.