Research shows that socioeconomic status (SES) can impact adolescent use of alcohol and smoking. These relationships may be mediated by stress, psychosocial reserves, and negative emotions. I explored these relationships using the Reserve Capacity Model (RCM) as a theoretical foundation. The RCM suggests that individuals of low social status experience stress and must tap into tangible, intrapersonal, and interpersonal resources, often leaving these reserves depleted. Low reserves, in turn, predict the experience of negative emotions which can result in poor health outcomes. The RCM was later revised to integrate cultural constructs that can serve as stressors and resources (e.g., familism, which prioritizes the role of the family as a supportive network). The purpose of this study was to test the RCM using culturally relevant variables as mediators of relationships between SES, alcohol use, and smoking in a sample of Hispanic American adolescents. I predicted that low SES would positively predict stress (e.g., perceived discrimination and acculturative stress). Stress, then, would be negatively related to reserve capacity (i.e., familism, family cohesion, and fatalism), which, in turn, would negatively predict symptoms of depression. Then, depressive symptoms would be positively related to alcohol use and smoking. A sample of 1,386 Hispanic American adolescents completed self-report measures of these constructs across three school years. Counter to my hypotheses, baseline SES was unrelated to smoking and alcohol use at year three (controlling for baseline levels). Mediation hypotheses were partially supported. Results showed baseline SES predicted increased levels of perceived discrimination at year two, which, in turn, was significantly related to decreased familism and family cohesion also at year two. Family cohesion was significantly related to symptoms of depression at year two, which, in turn, predicted increased use of alcohol and smoking behaviors at year three. Findings suggest that low SES is associated with perceived discrimination, which negatively affects family functioning. In turn, challenges in the family seem to affect distress symptoms, which, in turn, predict alcohol use and smoking. Results imply that interventions designed to address adolescent perceptions of discrimination, or family cohesion, may positively impact rates of smoking and alcohol use among adolescents.