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Black adolescents use less alcohol, on average, than white adolescents. Prior research has struggled to explain the disparity in alcohol use between blacks and whites but not for a lack of potential mediating mechanisms. The current study draws on differential association theory and two waves of panel data (n = 1,016) to examine the influence of interracial friendship, the racial composition of peer groups, and communities on black–white differences in alcohol use. Findings indicate that (1) the racial composition of peer groups and communities influence changes in alcohol use, and (2) racial segregation contributes to racial disparities in alcohol use while interracial friendship reduces these disparities. Results suggest that the socially conservative values of the African-American community are a strong deterrent to adolescent drinking, affecting even those adolescents who are themselves white but associate with black youth.