Evidence about the relationship between contextual variables and substance use is conflicting. Relationships between neighborhood income and income distribution and the prevalence and frequency of substance use in 59 New York City (NYC) neighborhoods were assessed while accounting for individual income and other socio-demographic variables. Measures of current substance use (in the 30 days prior to the survey) were obtained from a random-digit-dial phone survey of adult residents of NYC and data from the 2000 U.S. Census to calculate median neighborhood income and income distribution (assessed using the Gini coefficient). Among 1355 respondents analyzed (female=56.2%, mean age=40.4), 23.9% reported cigarette, 40.0% alcohol, and 5.4% marijuana use in the previous 30 days. In ecologic assessment, neighborhoods with both the highest income and the highest income maldistribution had the highest prevalence of drinking alcohol (69.0%) and of smoking marijuana (10.5%) but not of cigarette use; there was no clear ecologic association between neighborhood income, income distribution, and cigarette use. In multilevel multivariable models adjusting for individual income, age, race, sex, and education, high neighborhood median income and maldistributed neighborhood income were both significantly associated with a greater likelihood of alcohol and marijuana use but not of cigarette use. Both high neighborhood income and maldistributed income also were associated with greater frequency of alcohol use among current alcohol drinkers. These observations suggest that neighborhood income and income distribution may play more important roles in determining population use of alcohol and marijuana than individual income, and that determinants of substance use may vary by potential for drug dependence. Further research should investigate specific pathways that may explain the relationship between neighborhood characteristics and use of different substances.