Poor sleep is associated with lifestyle, however, few studies have addressed the association between sleep quality and the neighborhood environment. This study aimed to investigate the associations between living environment factors and sleep quality in older people. Participants were community-dwelling people aged >= 65 years who participated in the 2010 Japanese Gerontological Evaluation Study. The data of 16,650 people (8102 men, 8548 women) were analyzed. Sleep quality (good or poor) was evaluated using a self-administered questionnaire. Multilevel Poisson regression analysis stratified by depressive status (measured by the Geriatric Depression Scale-15 [GDS]) was conducted with sleep quality as the dependent variable and social and physical environmental factors as explanatory variables. The 12,469 non-depressive respondents and 4181 depressive respondents were evaluated. The regression analysis indicated that non-depressive participants slept better if they lived in environments with few hills or steps (prevalence ratio [PR] = 0.75, 95% CI: 0.56-0.9) and with places where they felt free to drop in (PR = 0.51, 95% CI: 0.26-0.98). For depressive participants, these associations were not evident. Living alone, poor self-rated health, low income, and unemployment were associated with poor sleep quality. In addition to support with these individual factors, improving environmental factors at the neighborhood level may improve the sleep quality of community-dwelling older adults.