Though some parts of the region continue to be plagued by economic turmoil and political unrest, Europe dominated this year's best-of list with eight of the report's top 10 cities hailing from the region.
As CNN notes, the annual survey conducted by the global human resources consulting firm points to much of the the continent's qualities.
"Overall, European cities continue to have high quality of living as a result of a combination of increased stability, rising living standards and advanced city infrastructures," Slagin Parakatil, Senior Researcher at Mercer, told CNN.
New Zealand's Auckland, Canada's Vancouver and Australia's Sydney (which tied with Bern in Switzerland for 10th place) also made the report's top 10.
In the United States, Honolulu and San Francisco clinched the titles of the highest-ranking cities, coming in 28th and 29th, respectively.
According to the Mercer report, this year's ranking also separately identified the cities with the "best infrastructure." Singapore bagged the top spot for this distinction, followed by Frankfurt and Munich in second place.
On the other end of the scale, Baghdad was ranked -- among 221 cities -- the city with the lowest quality of living; while Port-au-Prince, Haiti, had the worst infrastructure.
Check out the slideshow below to find out which city Mercer finds the most livable in the world.
10. Sydney, Australia
Crowds gather at the naval base on Gargen Island in anticipation of the annual New Year's Eve fireworks display over Sydney Harbour on December 31, 2010. Billions of New Year revellers will welcome 2011 in a global blaze of fireworks and parties, temporarily banishing the misery of extreme weather which has struck countries across the world. Some 1.5 million people will cram Sydney's foreshore for fireworks on the iconic Harbour Bridge, while further north in Australia hundreds of thousands battle devastating floods which have left vast swathes of land under water. (DRINA THURSTON/AFP/Getty Images)
10. (tie) Bern, Switzerland
The Swiss Parliament building is seen behind a tree on a rainy day on September 22, 2012 in Bern. (FABRICE COFFRINI/AFP/Getty Images)
9. Copenhagen, Denmark
This May 6, 2007 file photo shows Copenhagen's picturesque Nyhavn harbor. (AP Photo/Jan Olsen,File)
8. Geneva, Switzerland
In this July 16, 2009 photo, Geneva's signature Jet d'eau, the towering fountain rising 460 feet (140 meters) from a jetty in the lake is seen in the center of Geneva, Switzerland. (AP Photo/Anja Niedringhaus)
7. Frankfurt, Germany
The skyline stands illuminated in this aerial picture of the financial district on September 15, 2011 in Frankfurt am Main, Germany. (Ralph Orlowski/Getty Images)
6. Düsseldorf, Germany
The Duesseldorf TV tower pictured in the German city of Duesseldorf on December 14, 2011. (PATRIK STOLLARZ/AFP/Getty Images)
5. Vancouver, Canada
A rainbow stretches across Vancouver Harbor in Vancouver, British Columbia, Monday, Feb. 8, 2010. (AP Photo/Odd Andersen)
4. Munich, Germany
Tourists take a view from the tower of "Alter Peter", right, the observatory of the "Deutsches Museum" in Munich, Germany, Monday, July 24, 2000 over the Bavarian capital Munich with its famous landmark Frauenkirche, left. (AP Photo/Camay Sungu)
3. Auckland, New Zealand
View of the skyline in Auckland during the 2011 Rugby World Cup on October 21, 2011. (Gabriel Bouys/Getty Images)
2. Zurich, Switzerland
View of the city of Zurich, Switzerland, on May 19, 2007. The Wasserkirche church, the river Limmat, the Grossmuenster church, the Lake Zurich, the Fraumuenster church, the St. Peters church and the Swiss National Museum (Landesmuseum) can be seen from left to right with the Alps in the background. (AP Photo/Keystone, Alessandro Della Bella)
1. Vienna, Austria
Christmas lights and decoration illuminations are seen in front of the Belvedere Palace in Vienna on December 2, 2012. (ALEXANDER KLEIN/Getty Images)
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