Introduction: So far, the planning and design of public urban spaces have not been specifically researched from the perspective of mental health. Only a few studies in the field of urban mental health have investigated the effect of different dimensions of public space design on mental health. Focusing on the street as a major type of public space in all cities around the world, the present study seeks to examine the effect of the dimensions and qualities of street design on mental health. Methods: This experimental study evaluates the psychological results related to two types of urban streets with and without motor traffic. Using a mixed design and a cross-sectional study of the users of public spaces (n = 547), we have measured their level of mental health as well as environmental perception after facing one of the two types of environment. The data were experimentally analyzed via partial least square structural equation modeling (PLS-SEM) and SmartPLS 3.0 software package. Results: The results show that mental health in pedestrian streets is greatly affected by micro-level physical features of the environment and more specifically by natural elements. Whereas, in car-dominated streets, the macro-level physical features of the environment have a stronger effect on mental health. From these features, pollution had the strongest effect on mental health in car-dominated streets. Three further factors are important to mental health in pedestrian streets which include social relationships, safety, and social surveillance. In both streets, factors such as mixed land use, public transportation, attractiveness, active edge, quality of the pedestrian path, soundscape, and air pollution have the closest association with mental health. Additionally, the dominance of cars not only affects mental health through air and noise pollution but also threatens it by limiting the social experience of space. Conclusions: Although experimental and longitudinal evidence is needed to verify findings, The study illustrates those spaces with better public qualities (i.e., pedestrian streets) tend to have stronger effects on citizens’ mental health.