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OBJECTIVE: Family functioning and peer influences are theoretically linked to child psychopathology. This study quantified the functional status of families with fathers with substance dependence with or without comorbid antisocial personality disorder and evaluated the peer environments of preadolescent offspring. The authors examined associations between the child’s psychopathology, paternal substance dependence/antisocial personality disorder status, and measures of family and peer environments. METHOD: Families with the presence or absence of paternal substance dependence were subdivided into those with and without paternal antisocial personality disorder. Grouped families were contrasted on measures of family functioning, the child’s peer affiliation, and the child’s problem behaviors. Regression analysis determined the influence of these factors on the child’s psychopathology. RESULTS: Families with paternal substance dependence functioned worse than normal comparison families. However, families with paternal substance dependence and antisocial personality disorder (N=34) did not differ markedly from those with substance dependence without antisocial personality disorder (N=84). The children of fathers with both substance dependence and antisocial personality disorder had greater affiliation with deviant peers than those with substance dependence without antisocial personality disorder and comparison families (N=104). CONCLUSIONS: Children of fathers with substance dependence and antisocial personality disorder demonstrated higher externalizing and internalizing psychopathology than those with substance dependence but not antisocial personality disorder and those without either condition. Paternal substance dependence/antisocial personality disorder status and the child’s affiliation with deviant peers were most robustly associated with the child’s psychopathology. Research is needed to develop interventions that effectively address parental risk and healthy peer relations.