ABSTRACT Objective To examine the concurrent correlates of internalizing and externalizing disorders among substance-abusing and substance-dependent juvenile offenders and to determine the association between psychiatric comorbidity and psychosocial functioning of the youths 16 months later. Method Participants were 118 juvenile offenders meeting DSM-II-R criteria for substance abuse or dependence and their families. A multisource measurement battery was used to assess drug use, criminal activity, family relations, peer relations, school functioning, and out-of-home placements. Results Comorbidity for externalizing disorders was associated with high rates of antisocial behavior and predicted worse 16-month outcomes than substance abuse alone or substance abuse with comorbid internalizing disorders. For criminal activity and drug use, the presence of internalizing disorders buffered the deleterious effect of externalizing disorders on substance-abusing and substance-dependent juvenile offenders. Conclusions Even in substance-abusing delinquents, a population already extreme in antisocial behavior, the presence of externalizing disorders indicates high risk for deterioration. J. Am. Acad. Child Adolesc. Psychiatry, 1999, 38(9):1118–1124.