Between October 1994 and December 1997, 240 patients receiving treatment for cocaine or opiate dependence entered the study. Diagnoses of cocaine or opiate dependence were made by trained intake workers under the supervision of psychologists. The 240 patients were from a total sample of 1,438 patients receiving treatment for drug abuse. Parents dependent on cocaine or opiates completed the Child Behavior Checklist for 410 children (218 boys and 192 girls) between 2 and 18 years of age. Children of drug abusers were demographically matched to referred children (RCs) and nonreferred children (NRCs). Results showed RCs scored lower than children of drug abusers and NRCs on most competence scales and higher than children of drug abusers and NRCs on all problem scales. Children of drug abusers scored lower than NRCs on most competence scales and higher than NRC's on Withdrawn, Thought Problems, Delinquent Behavior, Aggressive Behavior, Internalizing, Externalizing, and Total Problems. Group status also predicted clinical range scores on most competence and all problem scales. While children of drug abusers showed more internalizing and externalizing psychopathology relative to matched NRCs, they showed significantly less psychopathology than RCs. The authors conclude that children of drug abusers should be targeted for preventive interventions. 29 references and 2 tables