Homonegative verbal comments, i.e., degrading or stigmatizing comments in reference to sexual orientation, whether they are direct or overheard, can have negative effects on youth. However, less is known about the association between the source (friends and non-friends) of homonegative comments and psychosocial well-being. Canada has adopted clear laws against discrimination based on gender and sexual orientation, and schools have established practices and policies to protect and empower sexual minority youth. In an increasingly inclusive context like Canada, this investigation examined the effect of the sources of hearing and overhearing comments on psychosocial well-being. Further, participants’ gender identity and sexual minority status were tested as moderators of the links between homonegative comments and psychosocial well-being. Data were obtained from a cohort of students in the second year of a four-year school-based Wellness Initiative in urban western Canada (N=1371; 51% male, mean age = 15.26 years, SD 1.5). Students were in grades 8 to 12, and 21% identified as a sexual minority (including mostly heterosexual as members of the sexual minority group). The survey was administered during regular school hours on individual tablets running survey software. Self-reported measures included the Homophobic Content Agent Target (HCAT) Scale, Mattering to Others Questionnaire (MTOQ), Modified Depression Scale (MDS) and Perceived Safety at School Scale. Analyses included chi-square to compare prevalence of overhearing and being targets of homonegative comments by gender and orientation, and by source of the comments (none, friends, others and both). 2 X 4 ANOVAS for gender by source of comments, and for orientation by source, were used to test associations between exposure to homonegative comments and mattering to others, depressive symptoms, and perceived safety. Homonegative comments were pervasive: only one third (34%) reported no homonegative comments, 13% overheard only friends, another 13% overheard only others, and 37% overheard homonegative comments by both; being directly targeted was somewhat less common, with 53% reporting no comments, 12% targeted by friends, 8% by others, and 24% targeted for comments by both friends and others. Boys reported overhearing [χ2(3)=54.76, p<.001] and being targeted [χ2(3)=161.24, p<.001] for homonegative comments more than girls, and sexual minority boys and girls were more likely to overhear homonegative comments than non-sexual minorities. ANOVAs showed regardless of orientation, youth who were both targeted and overhead homonegative comments were less likely to perceive themselves as mattering to friends, and had higher scores on depressive symptoms than youth who never heard or were targeted by comments. Gender moderated the association between comments and mattering to friends with boys affected more than girls. Students’ sense of safety at school was positively associated with the absence of homonegative speech or only hearing it from friends, rather than others. In Canada, despite efforts towards reducing discrimination and fostering inclusion for sexual minority and gender diverse youth, homonegative speech is still present in schools, and sexual minority and heterosexual youth alike continue to experience its negative effects on their sense of safety, mattering to others, and mental wellbeing.