A developmental cascade model for adolescent substance use beginning in infancy was examined in a sample of children with alcoholic and nonalcoholic parents. The model examined the role of parents’ alcohol diagnoses, depression and antisocial behavior in a cascading process of risk via 3 major hypothesized pathways: first, via parental warmth/sensitivity from toddler to kindergarten age predicting higher parental monitoring in middle childhood through early adolescence, serving as a protective pathway for adolescent substance use; second, via child low self-regulation in the preschool years to a continuing externalizing behavior problem pathway leading to underage drinking and higher engagement with substance using peers; and third, via higher social competence from kindergarten age through middle childhood being protective against engagement with delinquent and substance using peers, and leading to lower adolescent substance use. The sample consisted of 227 intact families recruited from the community at 12 months of child age. Results were supportive for the first 2 pathways to substance use in late adolescence. Among proximal, early adolescent risks, engagement with delinquent peers and parent’s acceptance of underage drinking were significant predictors of late adolescent alcohol and marijuana use. The results highlight the important protective roles of maternal warmth/sensitivity in early childhood to kindergarten age, parental monitoring in middle childhood, and of child self-regulation in the preschool period as reducing risk for externalizing behavior problems, underage drinking, and engagement with delinquent peers in early adolescence. Specific implications for the creation of developmentally fine-tuned preventive intervention are discussed.