Elevated risk of psychotic disorders in migrant groups is a public mental health priority. We investigated whether living in areas of high own-region migrant density was associated with reduced risk of psychotic disorders among migrants and their children, and whether generation status, probable visible minority status, or region-of-origin affected this relationship.We used the Swedish registers to identify migrants and their children born between Jan 1, 1982, and Dec 31, 1996, and living in Sweden on or after their 15th birthday. We tracked all included participants from age 15 years or date of migration until emigration, death, or study end (Dec 31, 2016). The outcome was an ICD-10 diagnosis of non-affective psychosis (F20-29). We calculated own-region and generation-specific own-region density within the 9208 small areas for market statistics neighbourhoods in Sweden, and estimated the relationship between density and diagnosis of non-affective psychotic disorders using multilevel Cox proportional hazards models, adjusting for individual confounders (generation status, age, sex, calendar year, lone dwelling, and time since migration [migrants only]), family confounders (family income, family unemployment, and social welfare), and neighbourhood confounders (deprivation index, population density, and proportion of lone dwellings), and using the Akaike information criterion (AIC) to compare model fit.Of 468223 individuals included in the final cohort, 4582 (10%) had non-affective psychotic disorder. Lower own-region migrant density was associated with increased risk of psychotic disorders among migrants (hazard ratio [HR] 105, 95% CI 102-107 per 5% decrease) and children of migrants (103, 101-106), after adjustment. These effects were stronger for probable visible minority migrants (107, 104-111), including migrants from Asia (142, 115-176) and sub-Saharan Africa (128, 115-144), but not migrants from probable non-visible minority backgrounds (099, 094-104). Among migrants, adding generation status to the measure of own-region density provided a better fit to the data than overall own-region migrant density (AIC 36103 vs 36106, respectively), with a 5% decrease in generation-specific migrant density corresponding to a HR of 107 (104-111).Migrant density was associated with non-affective psychosis risk in migrants and their children. Stronger protective effects of migrant density were found for probable visible minority migrants and migrants from Asia and sub-Saharan Africa. For migrants, this risk intersected with generation status. Together, these results suggest that this health inequality is socially constructed.Wellcome Trust, Royal Society, Mental Health Research UK, University College London, National Institute for Health Research, Swedish Research Council, and FORTE.