Both adults and adolescents are thought to use alcohol and drugs in part to cope with the negative emotions that arise as a response to the experience of stressful life events, and this maladaptive coping is thought to play a role in the development of substance use disorders. Yet research has not substantiated this stress-negative affect link for adolescents. Moreover, other research suggests that to some degree, experiencing stressful life events is related to aspects of the environmental context that also predict substance use. Thus, it is unclear whether the observed relation between stress in adolescence and substance use disorders is the result of a causal chain or of common predictors. The current study examined a state-trait model of the occurrence of life events across adolescence, and to test whether stable or time varying variation in the occurrence of life events in adolescence was related to the development of drug and alcohol dependence by young adulthood when controlling for the effects of shared risk factors. The sample consisted of children of alcoholic parents (COAs, n = 207) and matched controls (n = 199), who were assessed at five interviews during adolescence ( M_age = 13, 14 and 15) and young adulthood (M _age = 20 and 25). Stressful life events were measured using a checklist of 18 life events, and young adult diagnoses of DSM-III-R drug and alcohol dependence disorder were obtained using structured diagnostic interviews. Common predictors of stressors and substance dependence included parental psychopathology, parenting, and adolescent behavior problems. Results indicated that life events exhibit both random and stable variation in occurrence across adolescence. Moreover, the effect of stability in the occurrence of life events on the risk for drug and alcohol dependence is explained by the effects of correlated risk factors. The current findings highlight the importance of considering different levels of time in examining variation in the occurrence of stressors. Moreover, the current study suggests that negative life events may be a characteristic of adolescents who are at risk for developing substance use disorders by young adulthood, but that they are not a direct causal agent.