Low-income populations, minorities, and children living in inner cities have high rates of asthma. Recent studies have emphasized the role of psychosocial stress in development of asthma. Residence in unsafe neighborhoods is one potential source of increased stress. The study objective was to examine the association between parental perception of neighborhood safety and asthma diagnosis among inner city, minority children. Cross-sectional data from a community-based study of 6-8-year-old New York City children were used. Asthma was defined as parental report of physician-diagnosed asthma and at least one asthma-related symptom. Parental perceptions of neighborhood safety were assessed with a questionnaire. Associations between perceived neighborhood safety and asthma were examined using chi-squared tests. Multivariate logistic regression analyses were then performed. Five hundred four children were included with 79% female, 26.5% non-Hispanic Black, and 73.5% Hispanic. Asthma was present in 23.8% of children. There was an inverse association between feeling safe walking in the neighborhood and asthma with 45.7% of parents of asthmatic children reporting they felt safe compared to 60.9% of parents of non-asthmatic children (p = 0.006). Fewer parents of asthmatic children than of non-asthmatic children reported that their neighborhood was safe from crime (21.7% versus 33.9%, p = 0.018). In multivariate analyses adjusting for race/ethnicity, age, gender, socioeconomic status, number of smokers in the home and breastfeeding history, parents reporting feeling unsafe walking in the neighborhood were more likely to have a child diagnosed with asthma (OR = 1.89, 95%CI 1.13-3.14). Psychosocial stressors such as living in unsafe neighborhoods may be associated with asthma diagnosis in urban ethnic minority children. Addressing the increased asthma burden in certain communities may require interventions to decrease urban stressors.