Children of prisoners are at increased risk of impaired health, behavioural problems and substance misuse; however, the causal pathways to these problems are unclear. Under some circumstances, parental imprisonment may result in improved outcomes for the child. This study investigates the impact of paternal arrest and imprisonment on child behaviour and substance use, as a function of child gender, and in the context of known social and familial risk factors. Longitudinal analysis of an Australian birth cohort (N = 2,399) recruited 1981-83, with child outcomes measured at age 14. Participants were recruited prenatally from a large, public hospital in Brisbane, Australia and followed up in the community. History of paternal arrest and imprisonment were based on maternal self-report, at age 14. Outcome measures included mother- and child-reported internalising and externalising behaviour (CBCL and YSR), and child self-reported alcohol and tobacco use. In univariate analyses, paternal imprisonment was associated with maternal reports of increased child internalising (OR = 1.82, 95%CI 1.08-3.06) and externalising (OR = 2.24, 95%CI 1.41-3.57), and alcohol use (OR = 1.68, 95%CI 1.11-2.53) at age 14. However, controlling for socio-economic status, maternal mental health and substance use, parenting style and family adjustment, these associations became non-significant. For boys only, in the multivariate model paternal arrest but not imprisonment predicted alcohol (OR = 1.79, 95%CI 1.09-2.95) and tobacco (OR = 1.83, 95%CI 1.03-3.25) use at age 14. The association between paternal arrest and imprisonment and adverse outcomes in adolescence is accounted for by well-established social and familial risk factors. Paternal imprisonment may not, in itself, increase the risk for child behaviour and substance use problems.