Descriptions of the 'socially excluded underclass' have listed illicit drug use amongst the plethora of social pathologies said to typify their behaviour. Few studies, however, have explored in detail the impact of drug use on the transitions of 'socially excluded' youth. This paper reports research undertaken between 1999 and 2001 in a severely 'excluded' locale in Northeast England, which had this as an aim. Qualitative interviews with 88 young people, and with professional 'stake-holders' who worked with them, are used to interrogate some current debates within the drugs research literature. Firstly, a three-fold typology of the drug-using behaviour of the sample is used to critique simplistic notions of 'normalisation'. Complete drug abstinence (coupled with wholly anti-drug views) co-existed alongside apparently widespread 'recreational' and 'problematic' drug use. At best, our evidence would support a theory of differentiated normalisation. Secondly, a broad concept of transition, that explores youth experiences holistically and that situates the shifting 'choices' of individual young people in the context of the legitimate and illegal opportunity structures that prevail locally is used to investigate the emergence of careers of 'problematic' drug use. Our evidence supports the conclusions of Parker and colleagues [New Heroin Outbreaks Amongst Young People in England and Wales (1998a)] that normative, cultural barriers between 'recreational' and 'problematic' drug use may be being eroded and that increasing proportions of 'socially excluded' youth are 'crossing the Rubicon' in drug careers that extend to heroin use. The paper concludes by emphasising the value of research that seeks to situate the biographical analysis of drug careers in context (particularly of the opportunities provided by local economies and changing drug markets) and of drugs strategies that seek to tackle the social and economic conditions that give 'poverty drugs' their appeal.