Objectives HIV/AIDS risk is embodied within multiple levels including structural and social levels. The aim of this study was to assess the effects of neighbourhood characteristics on HIV prevalence among injection drug users (IDU) residing in the area of Tallinn, Estonia in 2007. Methods A cross-sectional, multilevel design collecting individual-level datada behaviour survey including data on self-reported residency and HIV antibody testing among 350 IDU and neighbourhood-level datadaggregate measures on socio-demo-economic residential characteristics from the 2000 Estonian census. Geocoding and multilevel modelling analysis was employed. Results Among the 350 IDU recruited, earlier age at first injection, fentanyl as the main injection drug, receptive syringe sharing, main income source other than legal employment and ever attended a syringe exchange programme remained significantly associated with increased odds of anti-HIV positivity in the multivariable analysis involving individual effects with no predictors at the neighbourhood level. In the multilevel model, individual (earlier at IDU initiation AOR 1.86, 95% CI 1.01 to 3.44; injecting opioids AOR 4.43, 95% CI 2.74 to 7.18; receptive syringe sharing AOR 2.51, 95% CI 1.86 to 3.37; main income source other than work AOR 2.04, 95% CI 1.32 to 3.14; ever attended a syringe exchange programme AOR 2.58, 95% CI 1.83 to 3.61) and neighbourhood level (higher unemployment rate AOR 5.95, 95% CI 2.47 to 14.31; greater residential change AOR 1.89, 95% CI 1.09 to 3.26) emerged as significant predictors of individual HIV-positive status. Conclusions Our results indicate that both individuallevel and emergent neighbourhood-level factors contribute to HIV risk among IDU and are amenable for preventive interventions.