In neighborhood research, the concept of collective efficacy has been particularly successful in capturing social cohesion and behavioral expectations among residents. Research has spread beyond the U.S. where it originated, and many studies from different countries have shown that collective efficacy is related to structural disadvantage in similar ways and affects outcomes as crime, education or health. However, methodological issues about measurement and modeling persist, and no study has yet investigated the cross-cultural measurement equivalence of this scale. We close this gap using two recent neighborhood surveys from Australia and Germany with large samples of respondents (N = ca. 12.800) and neighborhoods (N = ca. 440) in four cities. We employ multilevel structural equation modeling to test for measurement equivalence of collective efficacy across countries and to model its association with concentrated poverty, ethnic diversity, and residential stability. We find that the measurement of collective efficacy is metrically equivalent in both countries, modeling two latent factors on the respondent level—the two components informal social control and social cohesion/trust—but only one latent factor on the neighborhood level. Considering the relationship between the key correlates of collective efficacy, we find broad similarities but also substantial differences across contexts and compared to U.S. research, particularly concerning the role of ethnic diversity which has a stronger diminishing effect in Germany than in Australia. Possible explanations for these differences are discussed.