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The purpose of this study was to conduct a randomized test of clinic- and home-based incentives plus parent training for adolescent problem alcohol use. Adolescents (N = 75) with alcohol misuse, with or without other substance misuse, were enrolled. All youth received individual Motivational Enhancement Therapy/Cognitive Behavior Therapy and weekly urine drug testing. The experimental condition (EXP) included Abstinence Incentives (clinic-based incentives for abstinence from all substances) plus weekly behavioral parent training that included a parent-delivered, abstinence-based, substance monitoring contract. The comparison condition (CONTROL) included Attendance Incentives (ATTI). All adolescents met DSM–IV criteria for alcohol abuse or dependence or reported recent binge drinking, and 77% (N = 58) met criteria for a cannabis use disorder or had recent cannabis use at baseline. Alcohol and cannabis use outcomes were compared across treatment conditions. A similar percentage of youth maintained complete alcohol abstinence across the 36-week follow-up in both conditions. However, among youth not entirely abstinent from alcohol, EXP resulted in a lower percentage of days using alcohol during the 36 weeks after the end of treatment than CONTROL. Among youth who also used cannabis at baseline, results showed similar benefits of EXP on cannabis use days. Combined individual and family based treatment, plus abstinence based incentives can reduce substance use days during and after treatment over and above individual evidence-based psychosocial treatment plus attendance incentives. Future research should focus on identifying cost-effective components and incentive levels and delivery via technology to facilitate dissemination.