The COVID‐19 pandemic had significant health and socioeconomic repercussions for Latine immigrant families and their children due to long‐standing social, economic, and immigration‐related inequities, with rural families particularly vulnerable. In particular, the mental health and well‐being of Latine youth may have been detrimentally impacted due to disproportionate family stressors and burdens. In the present study, we examined the effect of parent and youth COVID‐19 pandemic stress on youth mental health, and in turn, on youth well‐being using quantitative and qualitative data. Participants were Latine youth in rural and agricultural families in the US Midwest (N = 210, Mage = 12.10 years, 52.4% male, 36.2% first‐generation immigrants) and a primary caregiver (86.5% mothers, 92.7% first‐generation immigrant, mean income = 25‐30 K) as well as n = 19 dyadic qualitative interviews. Quantitative analyses revealed that both youth and primary caregiver COVID‐19 stressors were associated with youth mental health problems, and indirectly impacted five domains of youth well‐being (engagement, perseverance, optimism, connectedness, and happiness). Qualitative findings provided insights into how the COVID‐19 pandemic increased stress for mothers and children (e.g., job loss and economic hardship, COVID‐19 infection, online education challenges). The study demonstrates how the environmental context of the COVID‐19 pandemic shaped the individual and family‐level functioning of Latine immigrant families during this uniquely challenging time period.