Despite advances in characterizing human genotypes, the complex process through which genes exert their influence limits the application of molecular genetics to human diseases. Substance use disorders are necessarily complicated by gene-environment interaction because exposure to an exogenous substance is required for their development. The methods of genetic epidemiology are specifically designed to identify sources of complexity that impede etiologic findings and prevention efforts. The goal of this paper is to illustrate the application of family study methods to identify risk factors for substance abuse and their implications for prevention. The Yale Family Study is a controlled family study of the comorbidity of substance and psychiatric disorders. The sample consists of 223 probands with substance use and/or an anxiety disorders and community controls, 1218 adult first degree relatives and spouses, and 203 offspring (ages 7-17) followed for 8 years. Results indicated familial aggregation of substance disorders in adults and children, independence of familial aggregation of alcoholism and drug dependence, and specificity of familial clustering of some drugs of abuse. Familial factors are more strongly associated with substance dependence than abuse, with an attributable risk of 55%. Premorbid psychiatric disorders--social phobia and bipolar affective disorder in adults, and depression, anxiety, conduct, and oppositional defiant disorders in children--were strongly associated with the subsequent development of substance dependence (attributable risks ranging from 44 to 86%). A family history of substance abuse and premorbid psychopathology are strongly associated with the development of substance use disorders. Implications for primary and secondary prevention are discussed. As specific genetic vulnerability markers for substance use disorders become identified, application of the tools of genetic epidemiology may be employed to identify specific environmental risk factors that may serve as targets for prevention.