Alcohol is the most commonly used substance among adolescents in the United States, and adolescent drinking is associated with various health risk behaviors. Given the prevalence and consequences of adolescent drinking, understanding family factors that contribute to adolescent drinking is an important area for research. This study used three waves of data to evaluate a family stress model in which economic hardship is indirectly related to adolescent problem drinking through maternal psychological distress, parenting behaviors, and adolescent externalizing behaviors. Respondents included 300 mothers (71 % Black, 29 % White) and adolescents (51 % male) who were interviewed when adolescents were ages 10, 14, and 16. Structural equation modeling was used to test the hypothesized model and findings supported our hypothesized model. Economic hardship was positively related to maternal psychological distress. Maternal psychological distress was negatively associated with supportive parenting, which in turn was negatively associated with externalizing problems. Externalizing problems were positively associated with problem drinking. In support of our hypothesis regarding indirect effects, economic hardship was indirectly related to problem drinking through maternal psychological distress, parenting behaviors, and adolescent externalizing problems. The findings from this study highlight the role of family processes in adolescent problem drinking.