Associations among neighborhood structure, parenting processes, and the development of externalizing behavior problems were investigated in a longitudinal sample of early adolescents (from age 11 to 13). Mothers' reports of parental monitoring (at age 11), mothers' and youths' reports of the amount of youths' unsupervised time (at age 11), and youths' reports of positive parental involvement (at age 12) were used to predict initial levels (at age 11) and growth rates in youths' externalizing behavior as reported by teachers. Census-based measures of neighborhood structural disadvantage, residential instability, and concentrated affluence were expected to moderate the effects of parenting processes (e.g., parental monitoring) on externalizing behavior. Hierarchical linear modeling results revealed that less parental monitoring was associated with more externalizing behavior problems at age 11, and more unsupervised time spent out in the community (vs. unsupervised time in any context) and less positive parental involvement were associated with increases in externalizing behavior across time. Furthermore, the decrease in externalizing levels associated with more parental monitoring was significantly more pronounced when youths lived in neighborhoods with more residential instability.