The present study examined the effect of caregivers' experiences of racial discrimination on their adolescent children's psychological functioning among a sample of 264 African American dyads. Potential relations between caregiver discrimination experiences and a number of indicators of adolescents' (aged 12-17) psychological functioning over time were examined. It was found that caregiver discrimination experiences were positively related to adolescents' symptoms of depression and negatively related to their psychological well-being. Additional analysis revealed interactions between the effects of caregiver discrimination experiences and family income on all 3 outcomes. Greater caregiver discrimination experiences and lower family income were risk factors for the youth in the sample. These findings underscore the deleterious consequence of caregivers' discrimination experiences on African American youth's psychological health. (Contains 4 tables and 4 figures.)