Objectives: Despite growing interest in the impact of physical and social environment on mental health, data are lacking on the potential mediating effects of loneliness. We examined it in the association of several social and physical environmental characteristics with mental health among older adults in three municipalities in Flanders (Belgium).Methods: A total of 869 people aged 60 and over were interviewed. Loneliness was assessed through the De Jong Gierveld short scales for emotional and social loneliness. Social participation and social cohesion were assessed following the Neighborhood scales whereas physical environment characteristics were selected from the Neighborhood Environment Walkability Scale. Mental health was assessed through subscale psychological frailty of the Comprehensive Frailty Assessment Instrument plus (CFAI-plus). Linear regression models, including mediation analysis, were used to analyze the survey data.Results: After adjusting for individual characteristics, physical and social environment factors were significantly related to mental health with the significant mediation of emotional and social loneliness. Percentages mediated by both dimensions together were 61% for social cohesion, 43% for social participation, 35% for safety and 25% for mobility. Compared with social loneliness, emotional loneliness was a stronger mediating factor, particularly for mobility and safety. No significant associations between traffic density or basic service availability and mental health were found.Discussion: Improving the social and physical environment might result in a reduction in the prevalence of loneliness and in consequent improvement of mental health among older adults. Special attention should be paid to different types of loneliness.