This study estimates peer effects in diverse friendship networks by friend types. Evidence from friendship networks for 57,351 U.S. high school adolescents demonstrates that adolescents are more likely to make friends with someone of the same immigrant status or ethnicity ('similar friends') than those with different backgrounds ('dissimilar friends') and they interact more with their similar friends. Both types of friends influence adolescents' misbehaviors of smoking and drinking; yet similar friends have greater influences. Various potential mechanisms are contested, and the results suggest that higher interactions with similar friends can explain the heterogeneous peer effects.