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Few studies have examined in detail how specific behaviors of close friends put adolescents at risk for specific types of substance use. Using a prospective, longitudinal design, we examined how well the substance use of 248 young urban adolescents was predicted by perceptions of their 3 closest friends’ problematic behaviors: (1) using substances, (2) offering substances, and (3) engaging with friends in risky behavior (substance use, illegal behavior, violent behavior, or high-risk sexual behavior). Longitudinal multivariate repeated measures models were tested to predict tobacco, alcohol, and cannabis use and perceived closeness was tested as a moderator of the effects of perceptions of problematic peer behavior. Perceptions of peer substance use were significantly associated with tobacco use, and closeness moderated the influence of peer substance use and offers to use substances on tobacco use. Perceptions of problematic peer behaviors were not significantly associated with alcohol use and closeness was not significant as a moderator. Perceptions of peer substance use was significantly associated with cannabis use, and closeness moderated the influence of perceptions of peer risk behaviors, peer substance use, and offers to use substances on cannabis use. Results implicate the importance of understanding problematic peer behavior within the context of close, adolescent friendships. Adolescents with close friends who were substance users, who made offers to use substances, and who engaged in risky behaviors were more likely to use tobacco and cannabis. Perceptions of young adolescents’ close friends’ behaviors influenced their substance use up to 2 years later.