Research on Minorities' Diminished Returns (MDRs) has shown higher than expected substance use (tobacco and alcohol use) in middle-class Hispanic and Black youth and adults. In theory, some of this more than expected risk might be due to the high substance use problem of the social network. To better understand the role of social network as an explanatory mechanism behind higher than expected substance use of middle-class Hispanic and Black youth, this study tested MDRs of parental educational attainment on substance use involvement of biological relatives in Hispanic and Black middle-class youth, we compared ethnic groups for effects of parental educational attainment on the substance use involvement of biological relatives among American youth. Current longitudinal study used waves 1 and wave 4 data of the Population Assessment of Tobacco and Health- Adolescents (PATH; 2013-2018) study. The sample included 4264 nationally representative American youth who were followed for 4 years. The independent variable was parental educational attainment. The dependent variable was substance use involvement of biological relatives. Age, gender, and marital status of the family were the covariates. Ethnicity was the moderator. Linear regression was used to analyze the data. Parental educational attainment was inversely associated with substance use involvement of biological relatives in the pooled sample (OR = 1.36, 95% CI = 1.13 -1.63 for high school graduation and OR = 0.65, 95% CI = 0.53- 0.80 for college graduation). Hispanic ethnicity showed statistically significant interactions with parental educational attainment (OR = 2.26, 95% CI = 1.49 -3.44 for high school graduation and OR = 2.98, 95% CI =1.80 - 4.93 for college graduation), suggesting that the protective effect of parental educational attainment against substance use involvement of biological relatives is smaller for Hispanic youth than for non-Hispanic youth. While high parental educational attainment reduces substance use involvement of biological relatives, this protective effect is weaker for Hispanic than non-Hispanic youth. That means, substance use involvement of biological relatives is still high in middle-class Hispanic youth, which increases their risk of substance use. Future research should explore societal and contextual factors that cayuse MDRs of parental educational attainment on substance use of middle-class Hispanic families.