Although we know a lot about why households choose certain dwellings, we know relatively little about the mechanisms behind their choice of neighbourhood. Most studies of neighbourhood choice focus only on one or two dimensions of neighbourhoods: typically poverty and ethnicity. In this paper we argue that neighbourhoods have multiple dimensions and that models of neighbourhood choice should take these dimensions into account. We propose the use of a conditional logit model. From this approach we can gain insight into the interaction between individual and neighbourhood characteristics which lead to the choice of a particular neighbourhood over alternative destinations. We use Swedish register data to model neighbourhood choice for all households which moved in the city of Uppsala between 1997 and 2006. Our results show that neighbourhood sorting is a highly structured process where households are very likely to choose neighbourhoods where the neighbourhood population matches their own characteristics. We find that income is the most important driver of the sorting process, although ethnicity and other demographic and socioeconomic characteristics play important roles as well.