This paper examines ambiguities and tensions within James Hillman's ideas about the psychological value of the architecture of the built environment in contrast to that of the natural world. In his published works Hillman often describes the built environment and the natural world as equivalent in value, but on other occasions he celebrates the latter to the detriment of former. These contrasting approaches have significant implications for his celebrated conception of anima mundi, where psyche is found in the ‘outside’ word as much as ‘within’ our individual minds. The decisive question therefore is whether the psyche for Hillman is found as readily within the built environment as it is the natural world. This paper argues that Hillman's overall position does not allow a split between city spaces and the natural world: that the built environment is no less a site for psyche than the natural world. After describing instances of Hillman's apparent denigration of the built environment within his published and unpublished archival material, I outline a resolution to the perceived split by utilising his notions of ‘pathologizing’ and aesthetics. The paper concludes that not all, but most, buildings and urban spaces fail to house psyche in the world. For Hillman, only a built environment that is able to engage our aesthetic sensibilities can succeed in doing so, but the vast majority of urban spaces remain anaesthetised by the ego's preoccupation with all things superficial, pleasurable, pretty, and functional.