Latinos are the fastest growing segment of the population in the United States. Consequently, that growth will have a dramatic effect on this country.. The high number of Latino youth that drop out of school is exceedingly critical in light of the fact that by the turn of the century less than 14 percent of jobs will require less than a high school diploma. There is divergence among researchers as to the cause of the high drop out rates. Some attribute it directly to socioeconomic factors while others argue that those factors should be viewed as distal influences and that the home environment should be looked at more closely. Several investigations have found that aspects of family processes as proximal variables were correlated with school adjustment, even after controlling for overlap between family type variables and socioeconomic status or family structure;Bronfenbrenner (1979) states that it is important to consider the contribution of the family environment to academic success among children given that the home is the major ecological setting. Laosa's findings exemplify Bronfenbrenner's (1979) emphasis on ecology and environment;The primary purpose of this study was to investigate the effects of distal variables (maternal intelligence, maternal education, maternal employment and poverty) and proximal variables (home environment and parent-child interaction) on the academic achievement of Latino adolescents. Correlations, ANOVA, and multiple regressions were used. The ANOVAs examined differences based on race, gender and poverty status in the variables (distal, proximal and outcome) in this study. The main findings of the ANOVAs indicated main effects and interaction effects for maternal intelligence, maternal education, hours employed by mother per week for self-worth. The multiple regressions were done in three steps. First, regressing the mediating variables (home environment and the three parent-child interaction variables) on the predictor variables (maternal intelligence, highest grade completed, hours employed per week by mother and family poverty status) showed that maternal intelligence was significant for Black and non-Hispanic White mothers but not for Latino mothers. For the non-Hispanic White group, all the predictor variables were significant predictors of outcomes on the HOME scale for White adolescents. Second, a hierarchical regression was done which consisted of two steps. The main findings of the hierarchical regression indicated that maternal intelligence was the most important predictor overall and that the HOME environment was not a mediator but rather a predictor of academic achievement of Latino adolescents.