Tobacco consumption in multiple forms presents an emerging, significant and growing threat to the health of Indian adolescents, especially those from low socio-economic communities. Research in two phases was undertaken among economically disadvantaged adolescents in two urban slums of Delhi. In phase I, qualitative research methods such as focus group discussions and in-depth interviews were used to explore and understand the determinants influencing tobacco use among these adolescents. Prevalence of tobacco use was higher among boys than girls. Adolescents reported using tobacco in multiple forms, chewing tobacco being the most popular. Peer pressure, easy availability and affordability were important reasons associated with tobacco initiation and continued use. Though they had some knowledge about the harmful effects of tobacco, this was not sufficient to motivate them to abstain or quit. The community-based intervention model developed on the basis of the results of phase I was evaluated in phase II in a demonstration study with two slum communities. One was treated as the intervention and the other as control. A significant difference in current use of tobacco was observed between the study groups (p = 0.048), with the intervention group showing a reduction in use, compared with an increase in use among the control group. Post-intervention, the intervention group reported significantly lower fresh uptake (0.3%) of tobacco use compared with the control group (1.7%). No significant change was found for quit rate (p = 0.282) in the two groups. Community-based interventions can be effective in preventing adolescents from initiating tobacco use in a low-resource setting such as India.