Respiratory illness is an important childhood illness and a significant cause of infant mortality. This study examined the relationship between neighbourhood level variables and rates of respiratory illness for children less than 2 years of age, born in Saskatoon between 1992 and 1994. Rates of respiratory illness, as measured by proportion of children hospitalized and frequency of hospitalization and ambulatory visits to physicians, were higher among infants living in socially disadvantaged neighbourhoods. Multivariate predictive models for rates of respiratory illness support the research hypothesis that housing characteristics, in the presence of other neighbourhood characteristics, have a significant impact on determining the rates of respiratory illness among Saskatoon children.