This study examines ethnic differences in reported use of cigarettes, alcohol, cannabis, hard drugs, and non-prescription medications among a sample of adolescents and attempts to explain these differences in terms of income, ease of acquisition, and availability from friends. Data were obtained from 847 students three times over a five-year period. Results indicate consistent and significant differences among ethnic groups substance use at all three points in time. It was hypothesized that ethnic groups have differential access to substances and economic resources to purchase various drugs. To test these hypotheses, availability from friends, perceived ease of acquisition, income from earnings and gifts/allowances, and initial substance use were examined across ethnic groups and then used as covariates of the substance differences. A split-plot repeated measures design with covariates was used to compare changes in substance use across time and between ethnic groups. Earned income made a significant impact on explaining the ethnic differences for cigarette, alcohol, and given income on cannabis consumption. Adding community variables such as availability from friends, ease of acquisition, and initial drug use not only eliminates the effects of income variables on drug use, but in most cases, the ethnic differences among adolescents as well.