While research findings have linked smoking and depression, the causal mechanisms of this relationship are unclear. Some findings indicate that teens smoke to alleviate depression while other findings suggest that smoking causes depression. This study attempted to gain a better understanding of the relationship between smoking and depression by examining the potential mediating effect of peer influence. The hypothesis was that peer influences would partially mediate the relationship between depression and smoking. Participants were 863 students from schools across California who were part of a larger study of tobacco use among Latinos/Hispanics, Asians, and Persians/Iranians. Participants completed a set of survey questionnaires measuring their depressive symptoms, peer influence, experience with smoking, acculturation, and socioeconomic status. Results of regression analyses indicated that peers indeed mediated the relationship between depression and smoking, with peer influence related to depressed affect for both genders. Depression remained significantly related to smoking irregardless of peer influence only in the model for girls. The findings thus suggest that the relationship between teen smoking and depression is complex and may be mediated by other important variables in addition to peer influence. Future studies should longitudinally study mediation factors. Tables, references