The objective of the paper is to examine the influence of environmental quality and neighborhood characteristics on residential choices. A mixed-method research design was employed where quantitative and qualitative data were collected. Quantitative data was analyzed using descriptive statistics and Factorial ANOVA. Data transformation was done through summated scale. The results of Factorial ANOVA showed that the main effect for environmental quality was significant F (2, 373) = 7.646, p = 0.001. However, there was not a statistically significant main effect for neighborhood characteristics, F (2, 373) = 1.001, p = 0.368. On the other hand, results on interaction effect indicated that there was no interaction effect for neighborhood characteristics and environmental quality, F (4, 373) = 0.710, p = 0.586. Post-hoc analysis using Turkey HSD multiple comparison revealed that there was a significant positive mean difference (df =1.66) between those who agreed on the availability of aspects of environmental quality and those that disagreed. These results implied that residents of Kisumu city considered environmental quality aspects like water availability, recreational facility, power supply, noise, crowded neighborhood and building density more when making residential choices as compared to neighborhood characteristics. The national government, therefore, through the affordable housing projects and the property developers within the city should put into consideration these environmental qualities so as to meet the housing needs of the residents.