The spatial mismatch hypothesis postulates that employment deconcentration within U.S. metropolitan areas goes some way toward explaining higher unemployment and lower wages among ethnic minority groups, since these groups are more likely to reside in central-city areas. However, little consensus has emerged on the importance of spatial mismatch in explaining disadvantage in the labor market. This article argues that conflicting evidence is the result of the variety of methods that have been used to test the spatial mismatch hypothesis. Moreover, it draws attention to a number of hitherto uncovered flaws in some of these methods that introduce systematic biases against finding evidence in support of the hypothesis. In light of these flaws, favored methods for future research are highlighted. Drawing on evidence from British conurbations that display similar spatial inequalities to U.S. metropolitan areas despite much smaller ethnic minority populations, the article contends that race does not lie at the heart of the spatial mismatch problem. Three areas in which the spatial mismatch hypothesis should be reconceptualized are identified: first, its emphasis should be on spatial, not racial, inequalities; second, it needs to differentiate between residential immobility and residential segregation, which are quite different; and third, it needs to recognize that the extent and the effect of spatial mismatch are distinct and should be measured separately.