Issues concerning the allocation of research funds in the drug and alcohol field have been widely debated. A consensus workshop involving senior researchers and policy makers was convened to examine the appropriateness of current drug and alcohol research activities in Australia. The workshop identified several major barriers restricting research developments including lack of monitoring of research efforts, limited community support, inappropriate allocations of research funds which contributed to a low level of intervention studies, the lack of application of research findings by practitioners and ethical constraints in studies involving Aboriginal populations and in multi-centre trials. Agreement was reached on 16 recommendations which could increase the amount of high quality research in Australia directed at reducing the harm associated with alcohol, tobacco and other drug use. Strategies which funding bodies could use to encourage intervention studies were identified. A proposal for the Australian Medical and Professional Society on Alcohol and other Drugs to establish a Researchers' Group to encourage implementation of the recommendations was also endorsed by workshop participants.