This proposal seeks funding for three years to investigate the effects of rural economic stress on adolescent drug and alcohol use. Because of economic conditions approximating those of the 1930s in rural America, rural families are experiencing substantially increased risk for health and behavioral problems that are known to be associated with economic hardship. In effect, the economic environment has created a natural experiment which may serve to clarify stress processes that influence adolescent substance use. It is especially important to identify characteristics of individual family members and family interactions that either exacerbate or protect against the risk of substance use and antisocial behavior under stressful life conditions. To increase understanding of the processes involved, the proposed research will study a sample of 200 two-parent, rural families with a 7th grade adolescent in the home. The 2-wave, prospective panel study (yearly measurements) will assess the direct impact of economic stress on the quality and stability of family relationships and on the emotional, physical, and behavioral problems of individual family members. The status of family and individual characteristics early in the stress process is expected to condition (mediate or moderate) the eventual influence of economic hardship on adolescent deviance and substance use. Economic stress effects on risk factors such as emotional instability, marital distress, parental substance use, parent-child conflict, and other conduct problems of adolescents are expected to exacerbate the negative influence of economic stress on alcohol and substance use. Characteristics such as personal hardiness, use of constructive coping strategies, family problem-solving skills and support, and parent monitoring of adolescent behavior outside the home are expected to buffer the negative impacts of economic loss. Structural equation models (LISREL) will be used to determine the relationships between constructs across the two waves of data collection. In addition to their scientific significance, the findings will be valuable to human service professionals working with rural and other stressed families.