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Background Alcohol consumption is typically correlated with the alcohol use behaviors of one's peers. Previous research has suggested that this positive relationship could be due to social selection, social influence, or a combination of both processes. However, few studies have considered the role of shared genetic and environmental influences in conjunction with causal processes. Methods This study uses data from a sample of male twins ( N = 1,790) who provided retrospective reports of their own alcohol consumption and their peers' alcohol-related behaviors, from adolescence into young adulthood (ages 12 to 25). Structural equation modeling was employed to compare 3 plausible models of genetic and environmental influences on the relationship between phenotypes over time. Results Model fitting indicated that one's own alcohol consumption and the alcohol use of one's peers are related through both genetic and shared environmental factors and through unique environmental causal influences. The relative magnitude of these factors, and their contribution to covariation, changed over time, with genetic factors becoming more meaningful later in development. Conclusions Peers' alcohol use behaviors and one's own alcohol consumption are related through a complex combination of genetic and environmental factors that act via correlated factors and the complementary causal mechanisms of social selection and influence. Understanding these processes can inform risk assessment as well as improve our ability to model the development of alcohol use. [ABSTRACT FROM AUTHOR]