Abstract: The purpose of this study is to investigate, for the case of Melbourne, Australia, the link between walkable neighbourhoods and wellbeing and how this relationship may be mediated by physical activity. Employing data from the Household, Income and Labour Dynamics in Australia (HILDA) survey for 2013 and Geographic Information Systems (GIS), this study finds a link between a more walkable neighbourhood and wellbeing, mediated to a very marginal degree by physical activity. Across measures of life satisfaction, happiness, mental health and psychological distress this link is clearest for psychological distress. However, the nature of this relationship stands in stark contrast to earlier findings regarding walking and cycling behaviours. While more walkable neighbourhoods are associated with more total walking time, they are also associated with lower likelihood of engaging in the recommended level of physical activity. Hence, the mediated effect of walkable neighbourhoods on wellbeing is negative. Further, residual direct effect of walkable neighbourhoods of wellbeing is also negative. These findings suggest earlier evidence on walking and cycling behaviours and associated health promotional initiatives may be missing the broader pursuit. As such further research, perhaps considering alternative mechanisms to promote health and wellbeing and achieve desired public health outcomes. These findings may prove helpful to decision makers such as The Victorian Health Promotion Foundation (VicHealth) seeking to support the health and wellbeing of Victorians.