This study examines adolescent substance use in relation to family, peer and school factors in the context of Taiwan. Information on family characteristics, satisfaction with performance at school, and peer influence was collected using a case-control study in which a two-stage method was applied to ascertain substance use. A set of hypotheses on interrelationships of substance use (tobacco, alcohol, betel, illicit drugs) and influences were tested with a structural equation model. There was a strong negative relation between family factors and peer relationships (p=0.005). Family variables played an important role in motivation and effort to study (p=0.004). High motivation and effort to study (p=0.0012) and good school adjustment (p=0.078) led to higher satisfaction with performance at school. A significant positive association between peer relationships and deviant peer behaviour was observed (p<0.001). Satisfaction with performance at school was negatively related to deviant peer behaviour (p=0.052). The direct effect of deviant peer behaviour was marginally statistically significant (p=0.011) and an indirect effect of family factors on substance use was statistically significant (p=0.041). In conclusion, the study found that a strong family-peer relationship and family influence has a significant effect on substance use.