While social context has long been considered central to substance use disorder prevention and treatment and many drug-taking events occur in social settings, experimental research on social context has historically been limited. Recent years have seen an emergence of concerted preclinical and human laboratory research documenting the direct impact of social context on substance use, delineating behavioral and neurobiological mechanisms underlying social influence's role. We review this emerging preclinical and human laboratory literature from a theoretical lens that considers distinct stages of the addiction process including drug initiation/acquisition, escalation, and recovery. A key conclusion of existing research is that the impact of the social environment is critically moderated by the drug-taking behavior and drug use history of a social peer. Specifically, while drug-free social contexts can reduce the likelihood of drug use initiation and act as a competitive non-drug alternative preventing escalation, drug-using peers can equally facilitate initiation and escalation through peer modeling as a contingent reward of use. Likewise, social context may facilitate recovery or serve as a barrier that increases the chances of a return to regular use. We conclude by discussing evidence-based treatments and recovery support services that explicitly target social mechanisms or that have identified social context as a mechanism of change within treatment. Ultimately, new areas for research including the expansion of drug classes studied and novel human laboratory designs are needed to further translate emerging findings into clinical practice.