Objectives in this research were to examine contextual differences in correlates of substance use among high school students. The focus was on two broad categories of adjustment indices: personal psychopathology (internalizing and externalizing problems) and behaviors reflecting social competence (academic achievement, teacher-rated classroom behaviors, and peer acceptance or rejection). Associations between drug use and each of these constructs were examined in two sociodemographically disparate groups: teens from affluent, suburban families (n = 264), and low socioeconomic status adolescents from inner-city settings (n= 224). Results indicated that suburban youth reported significantly higher levels of substance use than inner-city youth. In addition, their substance use was more strongly linked with subjectively perceived maladjustment indices. Comparable negative associations involving grades and teacher-rated behaviors were found in both groups, and among suburban males only, substance use showed robust positive associations with acceptance by peers. Results are discussed in terms of developmental perspectives on adolescent deviance, contextual socializing forces, and implications for preventive interventions and treatment.