IMPORTANCE The concept of minorities' diminished returns refers to the smaller protective effects of educational attainment for racial and ethnic minority groups compared with those for majority groups. OBJECTIVE To explore racial and ethnic differences in the associations between parental educational attainment and youth outcomes among US adolescents. DESIGN, SETTING, AND PARTICIPANTS A cross-sectional study was performed of 10 619 youth aged 12 to 17 years who were participants at wave 1 of the Population Assessment of Tobacco and Health (PATH) study, a nationally representative survey, in 2013. Data analysis was performed from August to October 2019. MAIN OUTCOMES AND MEASURES The dependent variables were youth tobacco dependence, aggression, school performance, psychological distress, and chronic medical conditions. The independent variable was parental educational attainment. Age and sex of the adolescents and marital status of the parents were the covariates. Race and ethnicity were the moderating variables. Logistic regression was used for data analysis. RESULTS Among the participants, 5412 (51.0%) were aged 12 to 15 years, and 5207 (49.0%) were aged 16 to 17 years; 5480 (51.7%) were male. For non-Hispanic white youth, as parental educational attainment increased, there were stepwise reductions in the prevalence of tobacco dependence (13.2% vs 6.9% vs 2.7%), aggression (37.9% vs 34.8% vs 26.1%), low grade point average (84.2% vs 75.6% vs 53.3%), and chronic medical conditions (51.7% vs 50.8% vs 43.9%), but there was not such a trend for psychological distress (43.7% vs 48.6% vs 41.0%). Interactions were significant between Hispanic ethnicity and parental education on tobacco dependence (OR, 3.37 [95% CI, 2.00-5.69] for