We investigated whether perceived neighborhood problems (NP) predicted changes over a 2-year period in asthma-specific quality of life (QOL), physical functioning (PF), and depressive symptomology (DEP) in a longitudinal cohort of 340 adults with asthma. There is a threshold and plateau effect between NP and PF, such that NP do not affect changes in PF until the problems reach the level of Quartile 3. People who had NP scores in Quartile 3 had lower PF compared to people who reported NP in Quartiles 1 or 2 (mean difference -3.09). High NP also predicted over two-fold odds of high DEP (Center for Epidemiological Studies Depression [CES-D] score > or = 16) at follow-up (odds ratio=2.34; 95% confidence interval: 1.09-5.00). NP did not predict decline in QOL. Analyses adjusted for demographics, asthma severity, and baseline value of the health outcome.