Neighborhood conditions influence people’s health; sustaining healthy neighborhoods is a New York City (NYC) Health Department priority. Gentrification is characterized by rapid development in historically disinvested neighborhoods. The gentrification burden, including increased living expenses, and disrupted social networks, disproportionally impacts certain residents. To ultimately target health promotion interventions, we examined serious psychological distress time trends in gentrifying NYC neighborhoods to describe the association of gentrification and mental health overall and stratified by race and ethnicity. We categorized NYC neighborhoods as hypergentrifying, gentrifying, and not-gentrifying using a modified New York University Furman Center index. Neighborhoods with ≥100% rent growth were hypergentrifying; neighborhoods with greater than median and <100% rent growth were gentrifying; and neighborhoods with less than median rent growth were not-gentrifying. To temporally align neighborhood categorization closely with neighborhood-level measurement of serious psychological distress, data during 2000–2017 were used to classify neighborhood type. We calculated serious psychological distress prevalence among adult populations using data from 10 NYC Community Health Surveys during 2002–2015. Using joinpoint and survey-weighted logistic regression, we analyzed serious psychological distress prevalence time trends during 2002–2015 by gentrification level, stratified by race/ethnicity. Among 42 neighborhoods, 7 were hypergentrifying, 7 were gentrifying, and 28 were not gentrifying. In hypergentrifying neighborhoods, serious psychological distress prevalence decreased among White populations (8.1% to 2.3%, β = -0.77, P = 0.02) and was stable among Black (4.6% to 6.9%, β = -0.01, P = 0.95) and Latino populations (11.9% to 10.4%, β = -0.16, P = 0.31). As neighborhoods gentrified, different populations were affected differently. Serious psychological distress decreased among White populations in hypergentrifying neighborhoods, no similar reductions were observed among Black and Latino populations. This analysis highlights potential unequal mental health impacts that can be associated with gentrification-related neighborhood changes. Our findings will be used to target health promotion activities to strengthen community resilience and to ultimately guide urban development policies.