The interactive effects of peer behavior and adolescents' perceptions of authoritative parenting on grade point average (GPA) and drug use were examined. Two samples of 500 9th through 11th graders participated in a 1-year longitudinal study, and they and their friends provided reports of respective school grades and substance use. Changes in GPA and drug use are predicted by friend's grades and drug use. However, this effect is moderated by the adolescent's report of authoritative parenting. The positive impact of having a high-achieving friend is stronger among adolescents whose parents are relatively more authoritative. The deleterious impact of having a drug-using friend is stronger among adolescents whose parents are relatively less authoritative.