This report represents the perspective that adolescent substance use i
s best understood as an adaptation to an ecology defined jointly by fa
milies and peers. Hypotheses were tested on a sample of 206 boys in th
e Oregon Youth Study. The analyses proceeded in four steps. First, it
was found that the transition from middle to high school was a period
of rapid growth in smoking for boys with a prior history of low sociom
etric status. Second, a structural equation model was tested showing t
hat deviant peer association in early adolescence mediated the relatio
n between peer and family experiences in middle childhood and later su
bstance use. Third, an observational study of the boys with their best
friends revealed that active support for rule breaking and substance
use was associated with immediate escalation in substance use during t
he transition to high school. Finally, it was found that ineffective p
arental monitoring practices were highly associated with the boy's inv
olvement in a deviant peer network. In fact, a high degree of similari
ty was found between boys and their best friends for substance use whe
n parental monitoring was low. These analyses show that substance use
in adolescence is embedded within the proximal peer environment, which
in turn, emerges and is amplified within a context of low adult invol
vement and monitoring.