Introduction. Over the past two decades, alcohol consumption of Icelandic adolescents has decreased dramatically. The aim of this study was to quantify the extent of this reduction and compare it with the trend in cannabis use over a 20 year period and to identify possible explanations. Methods. We used data from the Icelandic participants to the European School Survey Project on Alcohol and Other Drugs study (collected via paper-and-pencil questionnaires in classrooms). The sample included all students in the 10th grade (54-89% response rate). Results. The percentage of participants who had never used alcohol during their lifetime rose from 20.8% in 1995 to 65.5% in 2015. Similarly, there was a decline in the proportion of students who had consumed alcohol 40 times or more, from 13.7% to 2.8%. During the same period, the number of students who had never used cannabis rose from 90.2% to 92.0%. In contrast, we found a small, but statistically significant, increase in the prevalence of those who had used cannabis 40 times or more, from 0.7% in 1995 to 2.3% in 2015. Parental monitoring increased markedly between 1995 and 2015, but availability of alcohol decreased. Perceived access to cannabis and youth attitudes towards substance use remained unchanged. Discussion. Although Iceland has enjoyed success in lowering alcohol use among adolescents over the past decades, and somewhat fewer claim to have ever tried cannabis, there has been a threefold increase among heavy users of cannabis. Increased parental monitoring and decreased availability of alcohol explain some of the changes seen.