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Finding direct and indirect influences of salient psychosocial and situational variables on problem substance use among homeless people is important in designing evidence-based, effective, and relevant interventions for this special population. A stress-coping paradigm in conjunction with situational items specialized for homeless people was used to explore predictive relationships in a sample of homeless adults (N = 664) among (a) psychosocial variables of self-esteem, social support, positive and negative coping, and emotional distress, (b) situational variables of homelessness history and quality of recent housing, and (c) outcomes of alcohol use, injection drug use (IDU), and non-IDU. Lower self-esteem predicted greater emotional distress, lower positive coping, greater negative coping, and more alcohol use. Social support predicted less emotional distress and more positive coping. Chronic homelessness predicted more emotional distress, less positive coping, greater alcohol use, and IDU. Poor housing was associated with more alcohol use and IDU. Substance abuse interventions among the homeless should have a dual focus that includes attention to psychological issues and negative coping patterns while also addressing situational, environmental factors, including encouraging provision of permanent supportive housing.