The aim of this study is to examine the association of smoking status with income inequality, relative deprivation, perception of relative material well-being and community-level social capital, controlling for individual-level indicators of social capital, and common socio-economic variables. Data were from telephone interviews of approximately 126 residents selected at random (using the Electronic White Pages) from each of 22 local government areas (LGAs) in the Melbourne metropolitan region, Victoria, Australia (total n = 2762). We used logistic regression to assess the association of covariates with smoking status. Being a smoker was associated with a higher level of perceived income inequality, lower perception of relative material well-being and living in a community with a lower degree of trust and safety. While the cross-sectional design of the study does not allow causal inferences, the results imply that smoking is less prevalent in communities that are more egalitarian and have a higher stock of social capital.