We investigated the links between racial/ethnic marginalization (i.e., having few same-race/ethnic peers at school) and adolescents' socioemotional distress and subsequent initiation of substance use (alcohol and marijuana) and substance use levels. Data from 7,731 adolescents (52% female; 55% White, 21% African American, 16% Latino, 8% Asian American) were drawn from the National Longitudinal Study of Adolescent to Adult Health. In our path analysis model, we found that adolescents who were racially/ethnically marginalized at school (i.e., who had less than 15% same-ethnicity peers) reported poorer school attachment, which was linked to more depressive symptoms. More depressive symptoms were associated with higher levels of subsequent marijuana and alcohol use. These relationships showed some variation by students' gender, race/ethnicity, and age. Findings suggest that the influence of school demographics extends beyond the academic domain into the health and well-being of young people.