Background: There is growing interest in workplace policies as a strategy to prevent or manage alcohol and other drug (AOD) problems. This study is the first to explore the prevalence and impact of AOD policies in Australian workplaces using a nationally representative dataset. Methods: A secondary analysis of the 2010 National Drug Strategy Household Survey was conducted (n = 13,590). Descriptive analyses explored the prevalence of AOD policies. Multinomial and logistic regression assessed the relationship between policies and health behaviours. Results: Workplace AOD policies were associated with reduced employee substance use. Having any AOD policy in place was associated with significantly decreased odds of high risk drinking (OR: 0.61). In terms of specific policy types, policies on 'use' and 'use plus assistance' were associated with significantly decreased odds of high risk drinking (OR: 0.64 and 0.43, respectively). 'Comprehensive' policies were associated with significantly decreased odds of drug use (OR: 0.72). AOD policies were not significantly related to absence due to AOD use, attending work under the influence, or usually consuming AOD at work. Conclusion: These findings provide empirical support for the value and efficacy of policies to reduce alcohol and drug problems. While basic policies on 'use' were associated with a reduction in high risk drinking, more comprehensive policies were required to impact drug use. Notably, alcohol/drug testing in isolation does not appear to be related to reduced employee substance use. Scope exists for Australian workplaces to implement effective AOD policies. This could result in considerable benefits for both individuals and workplaces.