The prevalence of antisocial behavior varies across time and place. The likelihood of committing such behavior is affected by, and also affects, the local social environment. To further our understanding of this dynamic process, we conducted two studies of antisocial behavior, punishment, and social norms. These studies took place in two neighborhoods in Newcastle Upon Tyne, England. According to a previous study, Neighborhood A enjoys relatively low frequencies of antisocial behavior and crime and high levels of social capital. In contrast, Neighborhood B is characterized by relatively high frequencies of antisocial behavior and crime and low levels of social capital. In Study 1, we used an economic game to assess neighborhood differences in theft, third-party punishment (3PP) of theft, and expectation of 3PP. Participants also reported their perceived neighborhood frequency of cooperative norm violation ("cheating"). Participants in Neighborhood B thought that their neighbors commonly cheat but did not condone cheating. They stole more money from their neighbors in the game, and were less punitive of those who did, than the residents of Neighborhood A. Perceived cheating was positively associated with theft, negatively associated with the expectation of 3PP, and central to the neighborhood difference. Lower trust in one's neighbors and a greater subjective value of the monetary cost of punishment contributed to the reduced punishment observed in Neighborhood B. In Study 2, we examined the causality of cooperative norm violation on expectation of 3PP with a norms manipulation. Residents in Neighborhood B who were informed that cheating is locally uncommon were more expectant of 3PP. In sum, our results provide support for three potentially simultaneous positive feedback mechanisms by which the perception that others are behaving antisocially can lead to further antisocial behavior: (1) motivation to avoid being suckered, (2) decreased punishment of antisocial behavior, and (3) decreased expectation of punishment of antisocial behavior. Consideration of these mechanisms and of norm psychology will help us to understand how neighborhoods can descend into an antisocial culture and get stuck there.