A review of the literature suggests that early substance initiation is related to a variety of negative outcomes, including substance misuse or abuse in adolescence and adulthood. This study examines potentially modifiable predictors of early substance initiation, including both family and peer factors known to influence early initiation. A theoretically derived model of substance initiation was tested using structural equation modeling. Results indicate that both family and peer factors have an impact on early substance initiation when children in this sample were 11 and 12 years old. The model explained 60% of the variance in substance initiation. Prosocial family processes (rules, monitoring, and attachment) had a significant impact on child peer association, decreasing involvement with antisocial peers. These prosocial family processes had a significant negative effect on substance initiation even while modeling the influence of antisocial peers. Implications for drug use prevention practice are discussed.