Using a structural equation model (SEM) and multiple linear regression (MLR), the factors influencing residents' satisfaction in high and medium density neighbourhoods of Lagos metropolitan city, Nigeria were examined. This study takes a different approach by categorizing the factors into four domains (social environment, transportation, environmental quality, facilities). A total of 239 respondents from low-income high density and 220 from medium-income medium density neighbourhoods of the city were randomly selected. The main objective of the study was to identify the predictors of neighbourhood satisfaction among the residents of the two neighbourhoods. The results showed that a significant relationship exists between the four domains and neighbourhood satisfaction of the residents. However, the model results showed some variations in the predicting power of each of the domain. The social environment (X² = 7.029, p = 0.218, GFI = 0.994, AGFI = 0.982, RMSEA = 0.030, df = 5, N = 450) had more influence on residents neighbourhood satisfaction compared to other domains. Other variables found to have significantly influenced neighbourhood satisfaction in the other domains were drainage (β = 0.29), waste management (β = 0.24), street lighting, (β = 0.23) and noise pollution (β = 0.22).The finding of the study substantiates the importance of social and physical environment factors on the well-being of urban residents in developing countries.