Refugee families undergo multiple challenges and hardships that tend to cause tremendous psychological distress in the migration and resettlement processes. This dissertation research was designed to explore refugee families‘ mental health in the social ecological contexts of displacement and homelessness and to investigate stressors and coping in relation to transition of resources including social capital of refugee families. With three theoretical frameworks, a social ecology theory, stress and coping theory, and social capital theory, the author developed a series of hypothetical statements as well as research questions to modify and refine hypotheses on stress and coping processes of refugee families. A modified analytic induction method was adopted for analysis of interview data from 26 Hmong and Somali families in Twin Cities area. The findings of this study revealed that psychological distress was deeply associated with challenges and transition in resources at various levels. Rearrangement of resources (cultural resources in particular) occurred after resettlement, which tended to impede coping capacity of refugee families and cause acculturation stress. Social capital, both bonding and linking, functioned as a critical form of resource for refugee families to resettle and adjust to the host community by supplementing personal, family, and cultural resources that are often sparse in refugee communities. The results of the current study imply that it is a critical coping strategy for refugee families to build or increase social capital, which sometimes leads families‘ secondary migration in search of better bonding social capital. This study also demonstrated high levels of psychological distress among refugee families, ranging from traumatic experiences before migration to acute stress after homelessness. Exposure to traumatic events before and during migration was salient in refugee families, while a lack of resources and frustrated coping strategies contributed to tremendous distress, which has been a chronic condition for the refugee families. This dissertation underscores the importance of social work practice focusing on culturally responsive resettlement services considering various challenges and cultural coping of refugee families. Policy interventions promoting family and bonding social capital are also critical to improve resettlement outcomes as well as refugee mental health.