BACKGROUND: Studies have shown that the prevalence of mental illness can vary between urban and rural locations. This study extended research to the countries of the former Soviet Union (fSU) by assessing the association between settlement type and psychological distress and whether factors associated with psychological distress vary by settlement type. METHODS: Data on 18,000 adults aged ≥18 years from the Health in Times of Transition (HITT) survey undertaken in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, and Ukraine in 2010/11 were analyzed. Settlement types were country capitals, regional capitals, cities/other urban settlements, and villages. Psychological distress was defined as the country-specific highest quintile of a composite score based on 11 questions. Logistic regression analysis with random effects was used to examine associations. RESULTS: In a pooled country analysis, living in a smaller urban settlement or village was associated with significantly higher odds for psychological distress compared to living in the country capital. Lower social support was a strong correlate of psychological distress in all locations except capital cities. LIMITATIONS: The psychological distress measure has not been formally validated in the study countries. CONCLUSIONS: Lower levels of urbanicity are associated with greater psychological distress in the fSU countries. As many Western studies have linked greater urbanization to poorer mental health, this highlights the need for caution in extrapolating findings from one part of the world to others and the importance of undertaking research on the geographical correlates of mental health in different world regions.