In marginalized urban neighborhoods across the USA, Latino youth are disproportionately represented among the growing number of youth gangs. Substance use among gang-involved youth poses both immediate and long-term health risks and can threaten educational engagement, future socioeconomic stability, and desistance. Conventional assessments of gang-affiliated youth and their peer network overlook the possibility that positive peer ties may exist and can foster health promoting behavior norms. Drawing on a positive deviance framework, in this study, we examine the relationship between positive peer network characteristics tied to post-secondary educational aspirations and frequent alcohol and marijuana use among Latino, gang-affiliated youth from a neighborhood in San Francisco. Using generalized estimating equations regression models across 72 peer network clusters (162 youth), we found that having close friends who plan to go to a 4-year college was associated with a lower odds of frequent marijuana and alcohol use (OR 0.27, p = 0.02; OR 0.29, p = 0.14, respectively) and that this association persisted when adjusting for risk characteristics (OR 0.19, p < 0.01; OR 0.25, p = 0.12). Public health can advance gang intervention efforts by identifying protective and risk factors associated with non-criminal health outcomes to inform participatory research approaches and asset-based interventions that contribute to building healthy communities.