The 2002 National Survey of Lifestyle Attitudes and Nutrition (SLAN) data on self-reported mental health for 5992 adults living in 328 Electoral Divisions across Ireland. The aim of this analysis was to determine if there was significant variance in self-reported mental health at Electoral Division (ED) level, and to determine whether this could be explained by social capital and sociodemographic factors at individual or ED level. 25.0% of respondents reported poor mental health. There was significant variability at ED level (variance 0.123 SE 0.034). Controlling for individual-level social and demographic variables did not affect the variability at ED level (variance 0.131, SE 0.050). People living in rural areas were less likely to report poor mental health and were more likely to report high levels of trust, which independently reduced the risk of reporting poor mental health and significantly reduced the variability at ED level (variance 0.046 SE 0.043). Indicators of social capital may reflect well-preserved community networks and support but are not necessarily related to material or social disadvantage.