This article examines the meaning of local contexts in the formation of young adults’ life trajectories and horizons of opportunities in southern Stockholm. Our investigation draws on latent class analysis (LCA) of people aged 25–59 years, which reveals typical latent life courses among the individuals. The local setting mapped with typical life courses is interpreted as an indication of habitus, further examined in interviews with young adults 17 to 19 years old and about to finish upper secondary school who actively consider different life plans. By combining Bourdieu's and Wacquant's social theories with Massey's conceptualization of space and place, our analysis illuminates four spatial processes of habitus formation: (1) broader social structures, where southern Stockholm is polarized in accordance with affluence and vulnerability; (2) symbolic images and perceptions that make school locations attractive or invisible; (3) young adults’ meetings and non-meetings-up that take place within and in between school, home and leisure activities; and (4) the different ‘layers’ of local settings, where social networks are interlinked differently to national organizations and institutions and provide young people with different horizons of opportunity. The combination of theories facilitates a mixed-methods approach that contributes to neighbourhood studies by uncovering multiple ways ‘place’ is embedded in the formation of trajectories.