Rapid urban economic growth often compromises residents’ mental well-being due to rising built density and increasing demand for infrastructure, which marginalize natural features such as Blue-Green Infrastructure (BGI). While BGI is widely acknowledged for climate resilience and storm water management, it’s potential to enhance mental well-being (MWB) remains underexplored, particularly in high-density urban environments. This study investigates how the spatial presence, quality, and accessibility of BGI influence MWB, including dimensions such as life satisfaction, emotional balance, and social interaction, by focusing on three diverse neighborhoods in Chennai, India—Anna Nagar (Residential), Teynampet (Institutional), and Kilpauk (Commercial and Transit-Oriented). A mixed-methods approach is adopted, integrating structured surveys and spatial indicators through the Community Happiness Index (CHI) to assess user perceptions. Findings reveal that frequency of BGI use proximity, and engagement purpose significantly correlate with higher MWB scores, while spatial inequities and limited access diminish psychological benefits. Notably, the study demonstrates that resilient, community-oriented BGI not only supports mental health but also aligns with the principles of sustainable water management by promoting multifunctional, water-sensitive urban spaces. These findings reinforce the importance of repositioning BGI as dual-purpose infrastructure—delivering both hydrological resilience and psychological restoration. The research contributes to global urban sustainability discourse and offers actionable insights for planners and policymakers aiming to integrate mental well-being into water-resilient urban design.