Aim: The aim of this study was to examine the association between neighborhood characteristics and type 2 diabetes (T2D) comorbidity in serious mental illness (SMI). We investigated associations of neighborhood-level crime, accessibility to health care services, availability of green spaces, neighborhood obesity, and fast food availability with SMI-T2D comorbidity. Method: A series of multilevel logistic regression models accounting for neighborhood-level clustering were used to examine the associations between 5 neighborhood variables and SMI-T2D comorbidity, sequentially adjusting for individual-level variables and neighborhood-level socioeconomic disadvantage. Results: Individuals with SMI residing in areas with higher crime rates per 1000 population had 2.5 times increased odds of reporting T2D comorbidity compared to the individuals with SMI residing in lower crime rate areas after controlling for individual and areal level factors (95% CI 0.91-6.74). There was no evidence of association between SMI-T2D comorbidity and other neighborhood variables investigated. Conclusion: Public health strategies to reduce SMI-T2D comorbidity might benefit by targeting on individuals with SMI living in high-crime neighborhoods. Future research incorporating longitudinal designs and/or mediation analysis are warranted to fully elucidate the mechanisms of association between neighborhoods and SMI-T2D comorbidity.