Background: Adolescence is a sensitive phase of human life featuring changes in physical, emotional, and social characteristics. Many teens experience stressful events and trauma, which can affect their mental health and increase their risk of initiating and continuing substance use. Genetic vulnerabilities impact this relationship. In the face of trauma, while some adolescents are vulnerable, others navigate similar experiences differently, show resilience, and generally fare better without developing substance use problems. Understanding the multiple contributory factors that impact this relationship is critical in informing clinical approaches and program development. Objective: To describe the intricate dynamics between trauma, resilience, and substance abuse among adolescents. This review attempts to offer a synopsis that clarifies existing perspectives on trauma and substance use in adolescents while indicating areas for future research, clinical, and intervention programs in this critical area of adolescent well-being. Methods: A literature review was conducted to reveal available studies related to trauma, adolescent substance use, and resilience. Synthesis of findings from empirical studies, a detailed discussion on trauma and developmental factors while also addressing resilience elements alongside patterns of substance use is presented. Conclusion: Trauma, resilience, and substance use are linked in a tri-directional relationship, which is complex and dynamic. Adolescents with trauma are at higher risk of initiating and continuing substance. Resilience impacts treatment-seeking and engagement and may reduce relapse risk. Future research recommendations include improving the cultural sensitivity of interventions, studying the effects of marginalized identities, and ensuring rigorous evaluation of and progressive development of intervention programs. Results: The review highlights the bidirectional connections between trauma and substance use in adolescents. We include the consideration of resilience in adolescent responses to trauma. Resilience may reduce the risk of substance use, improve treatment-seeking and engagement in the treatment of SUD in adolescents, and reduce the risk of relapse, thereby suggesting it is a third dimension in the relationship between trauma and substance use. This review also provides evidence-based interventions and policies that are tailored to the specific needs of a diverse population of adolescents. We uncover the gaps in research, especially regarding cultural specifics and intersectionality among marginalized identities.