Neuropsychiatric disorders (including substance misuse) are associated with the greatest burden of functional disability in young people, and contributory factors remain poorly understood. Early-onset substance use is one candidate risk factor which may inform functional prognosis and facilitate direction of interventions aiming to curtail impairment. Accordingly, we modelled associations between early-onset use of alcohol, tobacco, cannabis and amphetamine-type stimulants (ATSs) and longitudinal socio-occupational functioning (indexed by the Social and Occupational Functioning Assessment Scale) in an observational cohort presenting to early intervention mental health services. A clinical proforma collated demographic, clinical, and socio-occupational information for up to 60-months from presentation to services in young people aged 17–30. Of the wider cohort (n = 2398), 446 participants were selected with complete alcohol and substance use data. Latent class analysis was used to derive an ‘early-onset’ (n = 243) and ‘later-onset’ class (n = 203) based on age of first use of alcohol, tobacco, cannabis and ATSs. Maximum-likelihood multilevel analyses modelled functioning over time in care and tested associations with substance use latent class, age, gender and diagnosis. Membership in the ‘early-onset’ class (B = -1.64, p = 0.05), male gender (B = -3.27, p<0.001) and psychotic disorder diagnosis (B = -7.62, p<0.001) were associated with poorer functioning at presentation and at least one other time-point. To our knowledge, this is the first study to explore associations of early-onset substance use and longitudinal functioning in a cohort of young people with mental disorders. The identified factors may be useful for directing specific social (e.g. Social Recovery Therapy) or occupational (e.g. Individual Placement and Support) interventions to at-risk individuals, early in illness course.