This paper examined the relative influence of selection and socialization on alcohol and tobacco use in adolescent peer networks and peer groups. The sample included 1419 Finnish secondary education students (690 males and 729 females, mean age 16 years at the outset) from nine schools. Participants identified three school friends and described their alcohol and tobacco use on two occasions one year apart. Actor-based models simultaneously examined changes in peer network ties and changes in individual behaviors for all participants within each school. Multi-level analyses examined changes in individual behaviors for adolescents entering new peer groups and adolescents in stable peer groups, both of which were embedded within the school-based peer networks. Similar results emerged from both analytic methods: "Selection" and "socialization" contributed to similarity of alcohol use, but only "selection" was a factor in tobacco use. (Contains 2 tables.)