A growing literature examines whether the poor, the working class, and people of color are disproportionately likely to live in environmentally hazardous neighborhoods. This literature assumes that environmental characteristics such as industrial pollution and hazardous waste are detrimental to human health, an assumption that has not been well tested. Drawing upon the sociology of mental health and environmental inequality studies, we ask whether industrial activity has an impact on psychological well-being. We link individual-level survey data with data from the US. Census and the Toxic Release Inventory and find that residential proximity to industrial activity has a negative impact on mental health. This impact is both direct and mediated by individuals' perceptions of neighborhood disorder and personal powerlessness, and the impact is greater for minorities and the poor than it is for whites and wealthier individuals. These results suggest that public health officials need to take seriously the mental health impacts of living near industrial facilities.