We investigate the prospective association between neighbourhood-level disadvantage and cardiovascular disease (CVD) among mid-to-older aged adults and whether physical activity (PA) mediates this association. The data come from the HABITAT project, a multilevel longitudinal investigation of health and wellbeing in Brisbane. The participants were 11,035 residents of 200 neighbourhoods in 2007, with follow-up data collected in 2009, 2011, 2013 and 2016. Multilevel binomial regression was used for the cross-sectional analysis and mixed-effect parametric survival models were used for the longitudinal analysis. Models were adjusted for age, sex, education, occupation, and household income. Those with pre-existing CVD at baseline were excluded from the longitudinal analyses. The mediated effect of PA on CVD was examined using multilevel generalized structural equation modelling. There was a total of 20,064 person-year observations across the five time-points clustered at three levels. Results indicated that the incidence of CVD was significantly higher in the most disadvantaged neighbourhoods (OR 1.50; HR 1.29) compared with the least disadvantaged. Mediation analysis results revealed that 11.5% of the effect of neighbourhood disadvantage on CVD occurs indirectly through PA in the most disadvantaged neighbourhoods while the corresponding figure is 5.2% in the more advantaged areas. Key findings showed that neighbourhood disadvantage is associated with the incidence of CVD, and PA is a significant mediator of this relationship. Future research should investigate which specific social and built environment features promote or inhibit PA in disadvantaged areas as the basis for policy initiatives to address inequities in CVD.