We find evidence for a unique model of peer similarity which may be particularly relevant to the etiology of substance use. First, we noted heritable influences on PSI – while this is consistent with the literature, it highlights the importance of studying the etiology of measures presumed to be ‘environmental’. Second, individual differences in PSI and RSI were attributable to partially overlapping genetic and completely overlapping environmental factors – the genetic overlap represents gene-environment correlation (rGE)(51;52), or those genetic influences that increase the likelihood of RSI and of exposure to substance-using peers. It is vital to control for rGE when studying GxE – for instance, measured gene studies may wish to examine if having a certain genotype increases an individual’s likelihood of both RSI and of exposure to PSI prior to testing whether PSI modifies the action of that genotype on risk for RSI.