Aims. To examine: (i) the prevalence of cannabis use and DSM-IV cannabis dependence among Australian adults, and (ii) correlates of level of cannabis involvement. Design. Cross-sectional survey assessing substance use and DSM-IV substance use disorders (abuse and dependence). Setting and participants. A household survey of a nationally representative sample of 10 641 Australians aged 18 years and older. Measurements. Trained interviewers administered a structured, modified version of the Composite International Diagnostic Interview (CIDI). Findings. In the past 12 months, 2.2% (95%CI:1.8, 2.6) of adults were diagnosed with DSM-IV cannabis use disorder, comprising cannabis dependence (1.5%; 95%CI: 1.2, 1.8) and cannabis abuse (0.7%, 95%CI: 0.6, 0.8). Almost one-third of cannabis users (31.7%; 95%CI: 27.7, 35.7) met criteria for cannabis dependence (21%; 95%CI: 16.7, 25.3) and abuse (10.7%; 95%CI: 8.0, 13.4). Multinomial logistic regression revealed that compared to non-dependent cannabis users, non-users were more likely to be female, aged 25 + years, out of the labour force and married/ de facto, and displayed lower levels of co-morbidity. In contrast, dependent cannabis users were more likely to be 18-24 years old, unemployed, and displayed higher levels of co-morbidity than non-dependent users. Conclusions. Cannabis use disorders affect approximately 300 000 Australian adults. A better understanding of the factors associated with cannabis dependence may help identify groups who have difficulties controlling use and aid the development of strategies for reducing cannabis-related harm.