Trends in prevalence in substance misuse in young people in the UK are described: increased use over the last decade, the tendency to polydrug use, the narrowing of the gender gap. The complex issues relating to the description, definition and classification, and diagnosis of psychiatric comorbidity and substance misuse are outlined. The fact that there is no uniformly accepted definition of what constitutes ‘dual diagnosis’ or ‘psychiatric comorbidity’ in young people is highlighted: this variability impacts upon clinical assessment and study design. Despite these considerable drawbacks, a degree of consistency is beginning to emerge in the co-occurrence of some conditions, e.g. disruptive and suicidal behaviours. It is recognized that psychological distress and substance misuse are also associated with multiple social and physical complications. The rapid advances in treatment options are presented. At present the ‘best practice’ is implementation of what works for adults with addiction and young people with psychiatric disorder. This includes psychosocial interventions such as motivational enhancement techniques and cognitive behavioural treatment, as well as appropriate safe (usually), short-term use of a range of pharmacological agents. Very few comprehensive designated adolescent addiction services exist, while child and adolescent mental health services are under serious pressure. Thus the need for a longitudinal and multidisciplinary approach, with appropriate assessment instruments in young people, is required to further explore diagnostic classification which will classify the degrees and patterns of relationships between disorders. In this way it may be possible to build up a picture of the nature and extent of numerous complex, and sometimes overlapping, problems and needs in children and adolescents in a variety of settings: primary and secondary care, the criminal justice system and educational establishments. This might strengthen the development of innovative treatment services where novel interventions are tested as a priority.