Anonymous surveys of alcohol use and emotional distress of 11th and 12th grade students were administered to 327 reservation Indian adolescents and 524 Anglo adolescents. Path models based on peer cluster theory were developed and tested. Results argue against a self-medication theory of adolescent alcohol use. Emotional distress variables had little effect on alcohol involvement, with the exception of anger which operated in opposite directions for the two groups. The highest relationship with alcohol involvement in both groups was with peer alcohol associations, confirming the a priori hypothesis that much of adolescent alcohol use is linked to peer associations. Those relationships, however, were much stronger in Anglo youth, suggesting that alcohol may be used more frequently in nonpeer situations by Indian youth, or at least in situations where the peers are not those close friends who have very similar patterns of alcohol use. The most important difference between Indian and Anglo youth, however, may be the role that anger plays in alcohol involvement. In Anglo youth, anger may be associated with problem behaviors including alcohol use. In Indian youth, higher anger is linked to higher self-esteem, and tends to reduce alcohol use.