Individuals with immigrant background generally perform less well in school than non-immigrants. Performing well in school may decrease the risk of substance use disorder (SUD). We investigated whether higher school performance is associated with a decreased risk of SUD in early adulthood among immigrants and non-immigrants and whether subsequent educational attainment and employment status partly explain the association. We used nationwide longitudinal Swedish data on 1 365 634 individuals born 1985-2000. Study individuals were categorized as non-immigrants, second-generation immigrants, and first-generation immigrants. School performance was based on the final school grades of compulsory education when most individuals were 16 years old. SUD was assessed between 20 and 30 years old using medical/legal registers. Cox proportional hazard models were used to examine the association between school performance and SUD by immigrant status, and whether it was partly explained by subsequent educational attainment and employment status. Higher school performance was associated with a decreased risk of SUD among all non-immigrant and immigrant groups where most immigrant groups had higher SUD risks. One standard deviation increase in school grades was associated with a 30%-37% decreased hazard of SUD. The significant hazard ratios varied between 0.63 and 0.70. The association between school performance and SUD was partly explained by subsequent educational attainment and employment status. Improving school performance during compulsory education may prevent SUD in early adulthood, particularly among immigrants who had higher risks. Securing subsequent educational attainment and employment could be additional prevention strategies against SUD.