This chapter will describe the results of two research projects and their implications for the treatment of chemically dependent adolescents. One project explored the relationship between family therapy and reductions in treatment dropout among chemically dependent adolescents in a therapeutic community (TC), and the other explored the relationships among adolescent chemical dependency, psychological differentiation, locus of control, and family process. The first study found that involvement in family therapy made a significant difference in reducing the number of youths who dropped out of a TC. The second study found that chemically dependent adolescents are psychologically undifferentiated. These teens are involved in a pseudoindividuated relationship with one parent who is psychologically and emotionally unavailable, while the other parent is peripheral. It was found that these teens become more undifferentiated with increasing time in the residential program. The residents internalized the TC belief system of personal responsibility while substituting dependency on one parent and drugs for dependency on the TC.