Little is known about the natural history of drug dependence. This article describes the development and predictors of DSM-IV nicotine dependence in adolescence when tobacco use is initiated. In a two-stage design, a survey was administered to 6th-10th graders in the Chicago Public Schools to select a cohort of adolescents. Household interviews were conducted with adolescents five times and with one parent (predominantly mothers) three times over 2 years. The analytical sample includes 353 youths, who started using tobacco within 12 months preceding Wave 1 or between Waves 1-5. Survival analysis estimated latency to individual DSM-IV nicotine dependence criteria and the full dependence syndrome. Twenty-five percent of youths experienced the syndrome within 23 months of tobacco use onset. Tolerance, impaired control and withdrawal were experienced most frequently. Youths who developed full dependence experienced their first symptom faster after tobacco use onset than those who experienced only one criterion through the end of the observation period. Cox proportional hazards models estimated the importance of time-constant and time-varying sociodemographic, tobacco and other drug use, parental and peer smoking, social psychological and biological risk factors for experiencing the first criterion and the full syndrome. Pleasant initial sensitivity to tobacco and number of cigarettes smoked the prior month predicted both outcomes. Parental dependence predicted the full syndrome. Significant covariates were generally the same across gender and racial/ethnic subgroups. The predictive significance of the initial smoking experience and parental dependence highlight the potential importance of genetic factors in the etiology of nicotine dependence.