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Substance use by welfare recipients is frequently mentioned as a barrier to well-being and social performance. This article uses nationally representative cross-sectional data and Michigan-specific panel data to summarize trends in substance use among AFDC/TANF recipients. It also examines the prevalence of substance dependence within the welfare population. Although almost 20 percent of welfare recipients report recent use of some illicit drug during the year, few satisfy criteria for drug or alcohol dependence as indicated by the short-form Composite International Diagnostic Interview. The article concludes by considering policy responses to substance use disorders following welfare reform.