Background Strategies are needed to identify youth developing schizophrenia. The present study aimed to determine whether adolescents treated for substance misuse were at elevated risk to develop schizophrenia, whether this risk has changed since the late 1960s, and whether substance misuse in adolescence predicted poorer outcomes through adulthood. Method In a Swedish city, since the mid-1960s there has been only one clinic for adolescent substance misuse. Three samples from this clinic were studied: 1992 individuals treated from 1968 to 1971 followed to age 50 years; 1576 treated from 1980 to 1984 followed to age 35 years; and 180 treated in 2004 followed to age 22 years. Each clinical sample was matched on age, sex and place of birth to an equal, or larger, number of randomly selected individuals from the general population. Schizophrenia, substance use disorders, physical disorders related to substance misuse, criminal convictions, poverty and death were identified using national registers. Results Individuals treated for substance misuse in adolescence were at increased risk to subsequently develop schizophrenia: in males the increase was approximately four-fold and in females between five- and seven-fold. There was no difference in risk for those treated in 1968-1971 and from 1980 to 1984 when cannabis use increased from 37.6% to 49.8% of the clinical samples. Among males who developed schizophrenia, treatment for substance misuse was associated with increased risk of substance use disorders and criminal convictions through adulthood. Conclusions Treatment programmes for adolescents misusing substances include a disproportionate number developing schizophrenia. Early detection and treatment have the potential to improve long-term outcomes.