Economic hardship is a stressor that affects large numbers of children and their families. This study estimated a model that included pathways linking economic conditions to the internalizing and externalizing symptoms of a multiethnic sample of urban adolescents. Similar to other prominent models, this model included parental distress and parenting as key constructs, but the expanded ecological model also included stressors outside the family and adolescents' associations with deviant peers as possible explanatory factors. Data from 300 adolescents and their parents were consistent with a model that showed linkages between economic conditions, parental depressive symptoms, supportive parenting, and internalizing symptoms. Stressors outside the family were associated with deviant peer affiliations which, in turn, predicted internalizing and externalizing symptoms. The implications of these findings for understanding economic conditions' influence on adolescents' mental health are discussed. © 2002 John Wiley & Sons, Inc.