Purpose Alcohol use is more prevalent in rural than urban areas in adult populations. Few studies have focused on adolescent drinking. This study investigated if adolescents in regional and rural areas of Australia were more likely to drink alcohol and if there were differences in parental drinking and alcohol supply across regions. Methods A subsample from the National Drug Strategy Household Survey 2013, the largest nationally representative household survey on drug use in Australia, was used for this study. Participants who were aged 12‐17 (N = 1,159) and participants who indicated they were parents or guardians of a dependent child (N = 7,059) were included in the analyses. Key measures were adolescent and parental alcohol use, parental supply of alcohol, and drinking location. Findings Compared to those living in major cities, adolescents from inner regional and rural areas were at 85% and 121% higher odds, respectively, of obtaining their first alcohol from parents, and at 131% and 287% higher odds of currently obtaining their alcohol from their parents. Those from rural areas were at 126% higher odds of drinking in the past 12 months. Parents from inner regional and rural areas were at 45% and 63% higher odds, respectively, of heavy drinking; at 27% and 52% higher odds of weekly drinking; and at 26% and 37% higher odds of drinking at home. Conclusions Adolescents from rural areas were at higher risk of alcohol use. Parents in rural areas were more likely to use alcohol in ways that encourage adolescent drinking.