Recognizing there have been few methodologically rigorous cross-national studies of youth alcohol and drug behaviour, state student samples were compared in Australia and the USA. Sampling methods were matched to recruit two independent, state-representative, cross-sectional samples of students in Grades 5, 7 and 9 in Washington State, USA, (n = 2866) and Victoria, Australia (n = 2864) in 2002. Of Washington students in Grade 5 (age 11), 10.3% (95% CI 7.2-14.7) of boys and 5.2% (95% CI 3.4-7.9) of girls reported alcohol use in the past year. Prevalence rates were markedly higher in Victoria (34.2%, 95% CI 28.8-40.1 boys; 21.0%, 95% CI 17.1-25.5 girls). Relative to Washington, the students in Victoria demonstrated a two to three times increased likelihood of reporting substance use (either alcohol, tobacco or illicit drug use), and by Grade 9, experiences of loss-of-control of alcohol use, binge drinking (frequent episodes of five or more alcoholic drinks), and injuries related to alcohol were two to four times higher. The high rates of early age alcohol use in Victoria were associated with frequent, heavy and harmful alcohol use and higher overall exposure to alcohol or other drug use. These findings reveal considerable variation in international rates of both adolescent alcohol misuse and co-occurring drug use and suggest the need for cross-national research to identify policies and practices that contribute to the lower rate of adolescent alcohol and drug use observed in the USA in this study.