BACKGROUND: Although urban place of birth has been identified as a risk factor for schizophrenia, the extent to which this association is mediated by socially patterned risk factors such as obstetric complications and childhood socio-economic position is unclear. The diagnostic specificity of the association within the clinical psychotic syndromes is also unclear. METHOD: A population cohort of 696025 males and females, born in Sweden between 1973 and 1980 and with linked birth and socio-economic data was followed up from age 16 for up to 9.8 years. Hospitalized cases of schizophrenia and other non-affective psychosis were identified from the Swedish Inpatient Discharge Register. We examined associations of these disorders with a three-level measure of urbanicity of birthplace before and after controlling for measures of foetal nutrition, obstetric complications and level of maternal education. RESULTS: Urban compared to rural birthplace was associated both with increased risk of adult onset schizophrenia (hazard ratio 1.34, CI 0.91-1.96) and other non-affective psychoses (hazard ratio 1.63, CI 1.18-2.26). None of these associations was greatly affected by adjustment for obstetric complications or maternal educational level. In the group of other non-affective psychoses urban-rural differences in disease risk were strongest among those born in the winter months. CONCLUSION: Urbanization of birthplace is associated with increased risk of non-affective psychosis but this is not confined to narrowly defined cases. The magnitude of the association in Sweden is lower than that reported in other studies. Causal factors underlying this association appear to operate independently of risks associated with obstetric complications and parental educational status.