Around half of all patients with schizophrenia are thought to abuse drugs or alcohol and there is good evidence to suggest that they have poorer outcomes than their non substance using counterparts. However, despite more than twenty years of research there is still no consensus on the aetiology of increased rates of substance use in people with psychosis. There is a clear need to understand the reasons for such high rates of substance use if treatments designed to help patients abstain from substance use are to be successful. This paper provides an update of the literature examining the reasons for substance use by people with psychosis, and includes a comprehensive review of the self report literature. The main theories as to why people with psychosis use substances are presented. There is evidence to suggest that cannabis may have a causal role in the development of psychopathology but not for other substances. The self report literature provides support for an 'alleviation of dysphoria' model of substance use but there is little empirical support for the self medication hypothesis, or for common factor models and bidirectional models of comorbidity. It is likely that there are multiple risk factors involved in substance use in psychosis and more work to develop and test multiple risk factor models is required.