Abstract: This study examined links between parent-youth differential acculturation and youth substance-use likelihood in a sample of 73 recently immigrated Latino families with middle-school-aged youth. Multiple agents were utilized to assess family functioning and youth outcomes. Findings suggested that a greater level of differential acculturation between parents and youth was associated with greater likelihood of future youth substance use. However, the relationship between differential acculturation and youth substance use was mediated by family stress processes and effective parenting practices. Differential acculturation was related to increases in family stress and decreases in effective parenting practices, and each of these, in turn, was related to increases in future substance-use likelihood among Latino youth. Findings implicate the need for advancing policies and practices that address acculturation as a family process, rather than as merely an individual psychological phenomenon.