Objective: Contingency management (CM) is efficacious in reducing drug use. Typically, reinforcers are provided on an individual basis to patients for submitting drug-negative samples. However, most treatment is provided in a group context, and poor attendance is a substantial concern. This study evaluated whether adding CM to group-based outpatient treatment would increase attendance and drug abstinence relative to standard care. Method: Substance abusing patients (N = 239) initiating outpatient treatment at 2 community-based clinics were randomized to standard care with frequent urine sample monitoring for 12 weeks (SC) or that same treatment with CM delivered in the context of group counseling sessions. In the CM condition, patients earned opportunities to put their names in a hat based on attendance and submission of drug-negative samples. At group counseling sessions, therapists selected names randomly from the hat, and individuals whose names were drawn won prizes ranging from $1 to $100. Results: Patients assigned to CM earned a median of $160 in prizes, and they attended significantly more days of treatment (d = 0.25), remained in treatment for more continuous weeks (d = 0.40), and achieved longer durations of drug abstinence (d = 0.26) than patients randomized to SC. Group adherence and therapeutic alliance also improved with CM. In addition, HIV risk behaviors were significantly lower in CM relative to SC patients during early phases of treatment and at the 12-month follow-up. Conclusions: These data demonstrate that CM delivered in the context of outpatient group counseling can increase attendance and improve drug abstinence. (Contains 4 tables and 2 figures.)