This article addresses shortcomings in the literature on environmental inequality by (a) setting forth and testing four models of environmental inequality and (b) explicitly linking environmental inequality research to spatial mismatch theory and to the debate on the declining significance of race. The explanatory models ask whether the distribution of blacks and whites around environmental hazards is the result of black/white income inequality, racist siting practices, or residential segregation. The models are tested using manufacturing facility and census data from the Detroit metropolitan area. It turns out that the distribution of blacks and whites around this region's polluting manufacturing facilities is largely the product of residential segregation which, paradoxically, has reduced black proximity to manufacturing facility pollution.