Aim The aim of the present study was to assess the relationship between neighborhood perception and poor self‐rated health among older Mexican Americans, adjusting for important background characteristics, such as neighborhood ethnic composition and other health conditions. Methods Drawing on the 2004–2005 Hispanic Established Populations for the Epidemiologic Study of the Elderly data (n = 1780), the present study used logistic regression to examine the effects of neighborhood perception on poor self‐rated health of older Mexican Americans. Results The results show that participants with a greater positive perception of their neighborhood were less likely to report poor self‐rated health, controlling for both socioeconomic status and health status covariates. Conclusions The findings suggest that positive neighborhood perception serves as an important protective factor in overall health. Geriatr Gerontol Int 2017; ••: ••–••.