Approximately 50% of patients with schizophrenia have a diagnosis of substance use disorder (SUD). Substance use has adverse consequences, starting from the prodromal period of schizophrenia and worsens the clinical course, prognosis, morbidity, and mortality. Four theories have been proposed to explain schizophrenia and substance use comorbidity. These include the diathesis-stress model or the two-hit model, the cumulative risk factor model, the self-medication model, and the primary addiction model or “reward circuitry dysfunction” model. In addition, substance use and schizophrenia share several genetic underpinnings BDNF (brain-derived neurotropic factor), COMT (catechol-O-methyltransferase), and AKT (protein kinase B), changes in neurotransmitter systems (dopamine, glutamate, GABA etc.) and dysfunction of brain reward circuitry. Substance-induced psychosis (SIP) is a clinical phenomenon which results in transition to schizophrenia in one quarter of patients with SIP. Cannabis is extensively studied and widely recognized for its association with chronic psychosis. Methamphetamine and cocaine use separately can result in psychosis with the potential to have a chronic course. Although debatable, there is a risk of chronic psychosis with psychedelics, MDMA, or dissociatives.