PurposeA parental history of substance abuse is a key risk factor for offspring's substance abuse. Identification of factors that may mitigate this effect is prerequisite to promoting resilience. In this study, we consider the substance use of peers in an adolescent's friendship network as a potential moderator of intergenerational continuity in substance abuse. MethodsProspective, longitudinal data from the Rochester Youth Development Study and the Rochester Intergenerational Study for 246 father–child dyads and 167 mother–child dyads were utilized. Ordinal generalized estimating equations were specified to examine the moderating role of friend's substance use in the relationship between parental substance use disorder and child's substance abuse between the ages of 13 and 17. ResultsFather's substance use disorder was associated with an increased risk of substance abuse by his child. Moreover, the harmful effect of paternal substance abuse on child's abuse of substances was apparent only when some or most of the child's friends used substances. Maternal substance use disorder was extremely rare in the sample and was not found to be associated with child's substance abuse, irrespective of the substance use of friends. ConclusionsThe intergenerational transmission of risk for substance abuse between father and child was mitigated when children were not exposed to friends who use substances, and exacerbated when children had substantial exposure to substance-using friends. Preventing the child's association with substance-using peers may be particularly important for children with this type of familial risk.