Substance misuse among people with schizophrenia is thought to be common and to adversely affect the outcome of the illness. The shortcomings of studies in this area include patient samples that are not epidemiologically-based, and methods for detecting substance misuse that have serious limitations. We investigated the frequency and severity of substance misuse among people with schizophrenia living in the community in London. Interviews were conducted with a community-based sample of 39 people with schizophrenia aged 35 years or less, living in Inner London. The assessments included ratings of psychopathology, movement disorders and substance misuse, and co-informant histories. Urine and hair specimens were analysed for a range of substances. Urine samples were collected from 37 patients and hair samples were provided by 36 patients. Comorbid substance misuse was reported or detected in 63% of the sample. The information elicited using a structured questionnaire for both informants and subjects represented an under-estimate of psychostimulant misuse and opiate misuse compared with the results obtained by hair or urine analysis. Hair analysis revealed that 12 (33%) of those patients providing samples had covertly abused amphetamines, opiates or cocaine in the previous 3 months. The study demonstrated that hair analysis is a well-tolerated, sensitive test for substance misuse. The technique has several advantages over questionnaires and urine analysis for clinical and research purposes. Further applications include the assessment of comorbid substance use in particular groups of patients with schizophrenia, such as during first-episode or psychotic relapse, or those with forensic problems or apparent resistance to treatment.