Adolescent alcohol involvement is associated with numerous negative outcomes, but also appears to have positive correlates, including subjective well-being. Additional research is needed to understand these paradoxical findings. The current study examines alcohol use, adverse alcohol-related (and other substance-related) consequences, and subjective well being in adolescence, and prediction to problem alcohol use in early adulthood. Participants in this longitudinal study, which extended from age 11 to age 21, were 208 rural teens (109 girls) and their families. Covariates included early substance use, early conduct problems, early depressed mood, gender, and parent educational attainment. Structural equation modeling showed that subjective well-being at age 16 positively predicted increased alcohol use at age 18. Alcohol use was not a significant predictor of subjective well-being; however, alcohol use at age 18 positively predicted alcohol problems at age 21, even while controlling for earlier adverse consequences and other predictors. Results help to further elucidate both the negative and positive correlates of underage drinking, and support the value of delaying alcohol initiation. (Published Abstract)