Aims: To describe the development of a deprivation index for Danish parishes and to investigate its association with all-cause mortality compared with the Townsend index and individual-level factors. Methods: Nine socioeconomic factors were aggregated to the parish level from individual-level register data comprising the entire Danish population in 2005. A principal component analysis was conducted to reduce the number of factors and to apply weights. An ecological analysis investigated the association between the Danish Deprivation Index (DANDEX) and standardised mortality ratios in Danish parishes. Results were compared with the Townsend index and a possible modifying effect of population density was investigated. Sensitivity of the index was investigated with multilevel survival analyses evaluating the association between all-cause mortality and DANDEX, the Townsend Index, individual-level socioeconomic factors, and population density. Results: DANDEX consists of two components measuring socioeconomic properties of all 2119 Danish parishes. The first component measures deprivation related to housing (house and car ownership) while the second component is related to classical measures of socioeconomic status (education, income, occupation). A clear gradient in standardised mortality ratios was seen across quintiles of both index components. Modifying effects were seen when stratifying the index components by population density. In a frailty model, DANDEX accounted for 76% of the between-parish variation in all-cause mortality, while the Townsend index and individual socioeconomic factors accounted for 71 and 76%, respectively. Conclusions: The index can be used to identify Danish parishes by their levels of deprivation and it provides municipalities with a tool to allocate resources to the geographic areas where they are most needed.