A theme in the life experiences of ethnic minority adolescents is the perception of discrimination and its concomitant challenges. Although existing literature has examined the perception of discrimination in adolescents, little research has examined how the cultural and familial setting may heighten or alleviate the impact of perceived discrimination on psychological outcomes in Latino youth. The current study investigated how traditional cultural values and parent-adolescent relationships prospectively interact with perceptions of group based discrimination to influence Latino adolescent mental health, adjustment, and risky behaviors. Data used from the Parents and Youth Study included 194 Mexican American (MA) adolescents. Adolescents reported on their perceptions of group discrimination, endorsement of traditional Mexican cultural values, and parent-child relationships in the 7th grade (Time 1). The study also used indices of externalizing (mother report), internalizing, substance use and risky sexual behavior (adolescent report) in 10th grade (Time 2). The findings demonstrated that traditional Mexican cultural values, particularly familism, moderated the relationship between perceived group discrimination and adolescent sexual behavior. Additionally, a better overall relationship with mother and father buffered the detrimental effects of perceived group discrimination on risky sexual behavior. The current work discusses future directions of how the context of culture and family may shape an adolescent's response to perceived discrimination and the well-being of minorities.