We seek to identify factors that facilitate or inhibit transmission of drug abuse (DA) from high-risk parents to their children. In 44,250 offspring of these parents, ascertained from a Swedish national sample for having a mother and/or father with DA, we explored, using Cox models, how the prevalence of DA was predicted by potentially malleable risk factors in these high-risk parents, their spouses and the rearing environment they provided. Analyses of offspring of discordant high-risk siblings and offspring of discordant sibling-in-laws and step-parents aided causal inference. Risk for DA in the children was associated with high-risk and married-in parental externalizing psychopathology, a range of other features of these parents (e.g., low education and receipt of welfare), and aspects of the rearing environment (e.g., neighborhood deprivation and number of nearby drug dealers). Offspring of discordant high-risk siblings, siblings-in-laws and step-parents suggested that nearly all these associations were partly causal. A multivariate analysis utilizing offspring of discordant high-risk siblings identified the six most significant potentially malleable risk factors for offspring DA: (1) criminal behavior (CB) in married-in parent, (2) community peer deviance, (3) broken family, (4) DA in high-risk parent, (5) CB in high-risk parent and (6) number of family moves. Children in the lowest decile of risk had a 50% reduction in their DA prevalence, similar to that seen in the general population. We conclude that transmission of DA from high-risk parents to children partly results from a range of potentially malleable risk factors that could serve as foci for intervention.