This study investigated the effects of high age-concentration of residential environment on: (1) the morale of the elderly; and (2) mutual-aid patterns with neighbors of the elderly. Empirical tests of hypotheses derived from the socio-environmental approach to aging were performed. The socio-environmental approach suggested that persons were most satisfied with themselves when there was congruency between what was expected of them by others in the environment and what they expected of themselves. As the local environment became concentrated with old people, the variety of situations with which persons were confronted was quite narrow in terms of demands on the elderly individual's behavior. In age-heterogeneous settings, however, the variety of situations that persons encountered were maximal, and the demands on behavior in this setting was great.