Aims To compare the relative frequency of eight indicators of problem drug use and potentially adverse social circumstances in drug-using parents and non-parents and to explore whether a profile based on these characteristics differs according to whether or not dependent children live with their drug-using parent. Design The study utilizes a 5 year national UK treatment monitoring system data set. Sample 61 425 users with, and 105 473 without dependent children accessing drug treatment services in England and Wales between January 1996 and December 2000. Measurements Information about parenthood and children's residence was routinely collected. Drug use and social circumstance indicators were daily heroin use, daily alcohol use, regular stimulant use, sharing of injecting equipment, living with another user, living alone, unstable accommodation, and criminal justice referral. Findings There were clear differences between drug-using parents according to where children live. Parents with children at home and non-parents showed fewer of the indicators than parents with children in care or elsewhere. Sixty-five percent of parents with none of the indicators lived with their children, compared with only 28% of those with three indicators and 9% of those with six or more indicators. Parents with children in care or living elsewhere showed the highest prevalence for each individual indicator. Conclusions Drug-using parents demonstrate a range of potentially unfavourable drug use behaviours and social circumstances, but those whose children live with them use drugs less frequently and live in more favourable conditions than those whose children live elsewhere. Protective factors may operate in family situations, while severe drug use and adverse social circumstances may result in a breakdown of family structures.