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Research indicates that a drinker’s environmental and social context can be differentially associated with drinking outcomes. Further, although many researchers have identified that more frequent use of protective behavioral strategies (PBS) is associated with lower alcohol consumption and negative consequences, scant research has examined how one’s drinking context may promote or hinder PBS use. The present study examined how the context of drinking each day (i.e., where and with whom) is associated with level of consumption and reported alcohol-related problems among n = 284 college drinkers (69.0% female) directly, as well as indirectly through the use of PBS. Two different dimensions of PBS are examined (i.e., “Limits” or limiting consumption, and “Avoidance” or avoiding alcohol in general or specific alcohol situations), as well as their relationship with daily drinking. Moreover, we explored these relationships intraindividually (within-person across time), as well as interindividually (between people). Daily drinking was assessed using a weekly diary design. Using multilevel structural equation modeling, we found that environmental context (i.e., drinking at a bar or party) is associated with heavier alcohol use directly and indirectly through PBS that involve limiting one’s drinking; these effects occurred only at the daily (within-person) level. Additionally, social context (i.e., drinking with friends) predicts elevated drinking but is unrelated to PBS use. Similar findings were present for alcohol-related problems, controlling for consumption level. College student drinking interventions may benefit from a focus on increasing the use of PBS within potentially risky drinking environments to help reduce problematic alcohol use.