Child and adolescent physical aggression are influenced by multiple contexts, such as peers, family, school, and neighborhood. However, the effect of neighborhoods on youth physical aggression remains unclear. The objective of this study was to quantitatively synthesize studies that have examined the effect of neighborhood disadvantage on physical aggression in children and adolescents and to identify potential moderators. We searched seven databases for articles published before April 25, 2015. Studies were considered eligible if they were published in peer‐reviewed journals, used multilevel data, controlled for neighborhood clustering, used physical aggression as the study outcome, and considered children or adolescents as the study population. Of the 152 eligible studies, we included 43 in the meta‐analysis. The results from the random‐effects model revealed that neighborhood disadvantage was positively and significantly associated with physical aggression (P < .001). Metaregression and moderator analyses further indicated a stronger association between neighborhood disadvantage and physical aggression among studies with younger participants, a higher percentage of female participants, and a longer follow‐up period (P < .05). Current findings, however, may not be generalized to other types of aggression. The observed neighborhood effects may also be limited because of the omission of studies that did not provide sufficient information for calculating the pooled effect. In summary, the results provide supporting evidence for the adverse effect of living in disadvantaged neighborhoods on physical aggression after adjusting for the individual‐level characteristics of children and adolescents. Interventions targeting structural contexts in neighborhoods are required to assist in reducing physical aggression in young people. Aggr. Behav. 42:441–454, 2016. © 2016 Wiley Periodicals, Inc.