In a Swedish national sample, the etiology of substance-induced psychotic disorder and its progression to schizophrenia were investigated. Researchers performed a follow-up of individuals with the registration of substance-induced psychotic disorder between 1997 and 2015 in national medical registries (N = 7,606) for a mean duration of 84 months. They observed large elevations in standardized familial risk scores for drug abuse and alcohol use disorder and modest elevations for nonaffective psychosis among individuals with substance-induced psychotic disorder. As per findings, substantial drug exposure seems leading to substance-induced psychotic disorder in individuals at high familial risk for substance abuse and moderately elevated familial risk for psychosis. Progression from substance-induced psychosis to schizophrenia was observed in correlation with familial risk for psychosis, but not substance abuse. Schizophrenia after substance-induced psychosis seems to be a drug-precipitated disorder in highly vulnerable individuals, not a syndrome predominantly induced by drug exposure.