Recent years have seen a resurgence of interest in the relation between networks and spatial context. This review examines critically a selection of the literature on how physical space affects the formation of social ties. Different aspects of this question have been a feature in network analysis, neighborhood research, geography, organizational science, architecture and design, and urban planning. Focusing primarily on work at the meso- and microlevels of analysis, we pay special attention to studies examining spatial processes in neighborhood and organizational contexts. We argue that spatial context plays a role in the formation of social ties through at least three mechanisms, spatial propinquity, spatial composition, and spatial configuration; that fully capturing the role of spatial context will require multiple disciplinary perspectives and both qualitative and quantitative research; and that both methodological and conceptual questions central to the role of space in networks remain to be answered. We conclude by identifying major challenges in this work and proposing areas for future research.