Racism is a pervasive threat to health with differential impact based on race and ethnicity. Considering the continued perpetration and visibility of racism online and in the news, vicarious racism, or “secondhand” racism when hearing about or witnessing racism being committed against members of one’s ethnic or racial group, is a particularly urgent threat in the context of such disparities and their subsequent health consequences. The current study examines if frequency of exposure to vicarious racism and the emotional impact of those experiences are linked to psychoactive substance use, and explores the role of ethnic identity in moderating these relationships. In a cross-sectional survey, 504 adult participants aged 18–78 (M age = 30.15, SD = 11.52, 52.6% female) identifying as Black/African American or Latine reported on their experiences with vicarious racism and alcohol, marijuana, and tobacco use over the past 30 days. Logistic regression was utilized to test hypotheses. Primary findings indicate that greater emotional impact of vicarious racism was associated with a 50% increase in odds of alcohol consumption and that ethnic identity moderated the association between vicarious racism and marijuana use. Greater emotional impact of vicarious racism was related to more marijuana use for those lower on ethnic identity, whereas there was no association for those higher on ethnic identity. Vicarious racism was not related to tobacco use. Results suggest that ethnic identity might be protective in the association of vicarious racism on substance use. Further research on this topic is needed as vicarious racism becomes an increasingly common experience among marginalized populations.