Poverty in adolescence is associated with later drug use. Few studies have evaluated the role of adolescent psychiatric disorders in this association.

This study aimed to investigate mediation and interaction simultaneously, enabling the disentanglement of the role of adolescent psychiatric disorders in the association between poverty in adolescent and later drug use disorders.

A national cohort study of 634 223 individuals born in 1985–1990, residing in Sweden between the ages of 13 and 18 years, was followed from age 19 years until the first in-patient or out-patient care visit with a diagnosis of drug use disorder. A four-way decomposition method was used to determine the total effect of the association with poverty and possible mediation by and/or interaction with diagnosis of adolescent psychiatric disorders.

The hazard ratios for drug use disorders among those experiencing poverty compared with those ‘never in poverty’ were 1.40 (95% CI, 1.32–1.63) in females and 1.43 (95% CI, 1.37–1.49) in males, after adjusting for domicile, origin and parental psychiatric disorders. Twenty-four per cent of this association in females, and 13% in males, was explained by interaction with and/or mediation by adolescent psychiatric disorders.

Part of the association between poverty in adolescence and later drug use disorders was due to mediation by and/or interaction with psychiatric disorders. Narrowing socioeconomic inequalities in adolescence might help to reduce the risks of later drug use disorders. Interventions aimed at adolescents with psychiatric disorders might be especially important.