The present study merged problem behavior and social ecological theories to examine how mental health and environmental factors, including culture, were associated with American Indian youth tobacco use. A stratified random sample of 205 reservation and 196 urban American Indian adolescents living in a Southwestern area was interviewed in 2001. Two-thirds of the reservation youth and half of the urban youth in this sample reported lifetime tobacco use. Logistic regression showed that, when controlling for age and location, a mental health factor (substance abuse/dependence) and environmental factors (e.g., family members’ mental health problems and peer misbehavior) were significant predictors of American Indian adolescent tobacco use. Cultural factors and location (reservation vs. urban) were not significant predictors of their tobacco use. Therefore, environmental and mental health factors should be assessed for and incorporated into tobacco use intervention and prevention plans for American Indian youth in both reservation and urban areas.