Existing literature based on Social Cognitive Theory has established key environmental and cognitive variables related to problem drinking in emerging adults, but further research is needed to understand the interaction between these variables. The aim of this study was to extend understanding of how environmental and cognitive variables interact to influence problem drinking among emerging adults. We hypothesized that cognitive factors of alcohol outcome expectancies (AOEs) and drinking refusal self-efficacy (DRSE) would sequentially mediate the relationship between environmental factors (perceived parental/peer drinking) and problem drinking. A sample of 984 Australian emerging adults (M age = 20.55, SD = 2.19, range: 18–25) completed an online survey including measures of demographics, substance use, environmental variables (perceived drinking by parents/peers), and cognitive variables (AOEs and DRSE). This study employed a cross-sectional design. Path analysis was used to identify indirect pathways for the relationship between environmental factors and drinking behaviour, through cognitive variables. In line with the predicted model, the relationship between parental drinking and problem drinking was sequentially mediated by AOEs, and then DRSE. Participants with heavier drinking parents reported higher AOEs (positive and negative), which related to having lower DRSE, and higher problem drinking. Similarly, the positive relationship between peer drinking and problem drinking was mediated by having higher positive and negative expectancies, but contrary to predictions, DRSE did not mediate these pathways. This study extends on previous research by revealing novel pathways between environmental influences for drinking behaviour, via social cognitive factors that are conducive to change.