Approximately 30–50% of people with serious mental illness have co-existing drug or alcohol problems (COSMHAD), associated with adverse health and social care outcomes. UK guidelines advocate both co-occurring needs being met within mental health services, but uncertainty remains about how to operationalise this to improve outcomes. Various unevaluated service configurations exist in the UK. A realist synthesis was done to identify, test, and refine programme theories of how context shapes the mechanisms through which UK service models for COSMHAD work, for whom, and in what circumstances. Structured and iterative realist searches of seven databases identified 5099 records. A two-stage screening process identified 132 papers. Three broad contextual factors shaped COSMHAD services across 11 programme theories: committed leadership, clear expectations regarding COSMHAD from mental health and substance use workforces, and clear care-coordination processes. These contextual factors led to increased staff empathy, confidence, legitimisation, and multidisciplinary ethos, which improved care coordination and increased the motivation of people with COSMHAD to work towards their goals. Our synthesis highlights that integrating COSMHAD care is complex, and both individual and cultural behavioural shifts in leadership, workforce, and service delivery are essential to ensure people with COSMHAD receive compassionate, trauma-informed care that meets their needs.