Approximately 63% of all incarcerated individuals in the U.S. identify as a parent (Glaze and Maruschak, 2010), with as many as 7% of children experiencing parental incarceration at some point in their lives (Murphey and Cooper, 2015). Historically, much of the parental incarceration literature has relied on between-groups comparison research, highlighting risks and determinants of pathology for youth with an incarcerated parent. However, significantly less research has attempted to understand resilience processes in the context of parental incarceration from a within-group resilience perspective. The overall goal of this dissertation research was to empirically test the theoretical Family Inequality Framework (Arditti, 2018) and better understand how family resilience processes influence the relationship between material hardship and child outcomes within the context of parental incarceration. Structural equation modeling was used to perform a mediational cross-sectional analysis. Results of these analyses suggest that parental mental health processes play an important role in mitigating adverse outcomes for families by mediating the effects of material hardship on youth academic adjustment in the context of parental incarceration. Theoretical, clinical, and policy implications, as well as future research directions are discussed.