OBJECTIVE To examine the progression of tobacco use and the patterns of comorbidity of tobacco use and psychiatric disorders. METHOD The authors conducted analyses of prospective and retrospective reports, collected from 1988 to 1998, of a sample of high- and low-risk youths identified on the basis of the presence or absence of a parental history of substance abuse or dependence. RESULTS A parental history of substance use disorders was associated with regular tobacco use and nicotine dependence, but not with experimentation for all youths. Individual and composite psychiatric diagnoses were strongly associated with nicotine dependence, but not with regular use or experimentation. While the presence of an affective disorder and drug abuse/dependence generally increased the risk for co-occurring nicotine dependence, analyses based on the temporal onset of disorders showed that it was the initiation of alcohol or drug use that predicted the progression to nicotine dependence. For low-risk youths, oppositional defiant disorder was the single psychiatric risk factor that predicted the transition to nicotine dependence. CONCLUSIONS This study adds to the accumulating evidence that has implicated comorbid psychiatric disorders in the etiology and subsequent course of nicotine dependence. In addition, family history may represent an important indicator of an increased risk for nicotine dependence.