Introduction: Mental ill-health, substance use and their co-occurrence among sexuality diverse young people during earlier adolescence is relatively understudied. The preventive utility of positive school climate for sexuality diverse adolescents’ mental health is also unclear, as well as the role of teachers in conferring this benefit. Method: Using Wave 8 ‘B Cohort’ data from the Longitudinal Study of Australian children ( N = 3127, M_age = 14.3), prevalence ratios and odds ratios were used to assess prevalence and disparities in mental ill-health and substance use, and multinomial logistic regression for co-occurring outcomes, among sexuality diverse adolescents relative to heterosexual peers. Logistic regression was used to assess associations between school climate and teacher self-efficacy with sexuality diverse adolescents’ mental health. Results: Mental ill-health prevalence ranged from 22% (suicidal thoughts/behaviour) to 46% (probable depressive disorders) and substance use between 66% (cigarette use) and 97% (alcohol use). Sexuality diverse participants were significantly more likely to report self-harm and high levels of emotional symptoms in co-occurrence with cigarette, alcohol and/or cannabis use. For each 1-point increase in school climate scores as measured by the Psychological Sense of School Membership scale, there was 10% reduction in sexuality diverse adolescents reporting high levels of emotional symptoms, probable depressive disorder, self-harm thoughts/behaviour and suicidal thoughts/behaviour. For each 1-point increase in lower perceived (worse) teacher self-efficacy scores as measured by four bespoke teacher self-efficacy items, odds of sexuality diverse adolescent-reported suicidal thoughts/behaviour increased by 80%. Discussion: Mental ill-health, substance use and especially their co-occurrence, are highly prevalent and pose significant and inequitable health and well-being risks. Schools represent a potential site for focusing future prevention efforts and educating and training teachers on sexuality diversity is a promising pathway towards optimising these.