Substance use during adolescence is a major public health concern, given the deleterious effects excessive use can have on brain development and social functioning into young adulthood. Past work has characterized how substance use is associated with neural response to monetary reward, and self-reported social support and stress; but less is known about associations among substance use, social experiences, and neural responses to social stimuli. Given that substance use often occurs in social contexts, there is a need to identify how neural response to social stimuli predicts substance use, especially in diverse samples such as Latinx populations, who face both greater vulnerability to high-risk use and greater risk of experiencing ethnic-racial discrimination. This dissertation examined how substance use across adolescence and young adulthood was associated with neural response to monetary reward, social inclusion, and social exclusion, as well as self-reported experiences of social support and social stress, in Mexican-origin individuals. Study 1 investigated bidirectional relations among adolescent neural response to social and monetary rewards and self-reported substance use from adolescence (age 16) to young adulthood (age 21), testing both cross-lagged effects and change scores to comprehensively capture change in neural function and substance use. Study 2 assessed the interplay of neural response to a social stressor, self-reported substance use, and self-reported experiences of social support and social stress from late childhood (age 10) to young adulthood (age 21). Further, Study 2 tested whether adolescent neural response to social exclusion and self-reported resistance to peer influence mediated links among substance use, social support (perceived support from family and friends, endorsed familism values), social stress (victimization by peers, ethnic-racial discrimination), and young-adult indicators of social functioning (social support, prosocial behaviors, romantic relationship quality). Study 1 results showed that neural activity to social reward in mid-adolescence predicted steeper increases in substance use by young adulthood, and that change in neural response to monetary reward was linked to change in substance use. Study 2 findings showed that early adolescent familism and social support predicted less substance use during young adulthood, partially mediated by adolescents’ response to social exclusion in the subgenual anterior cingulate cortex. Early experiences of ethnic-racial discrimination were associated with higher substance use, but not mediated by neural activity during social exclusion. Conversely, reporting more years of substance use by adolescence predicted less prosocial behavior and less support from family and friends during young adulthood; but neural activity to social exclusion and self-reported resistance to peer influence did not explain these associations. Taken together, these studies highlight the importance of how the developing brain processes socially-rewarding situations, non-socially rewarding situations, and socially-stressful situations. Neural sensitivity to social rewards and socially-stressful situations may be unique biomarkers that identify adolescents at high risk for excessive substance use. Understanding socio-neural predictors and consequences of substance use is key to prevention and intervention efforts designed for adolescents and young adults. Additionally, prevention and intervention programs that focus on individual behaviors without considering social context may be less effective, and especially so for certain adolescents who are highly sensitive biologically to peer behaviors and influences. Addressing substance use during adolescence can reduce the development of substance use disorders in adulthood, and its associated personal and financial costs to society.