Lohan, 23, was ordered by a court two weeks ago to wear a SCRAM bracelet to make sure she doesn't drink alcohol.
She also had to agree to random screening under the conditions of her recent probation hearing for her DUI convictions.
A source told RadarOnline.com: “She is clear of illegal substances. She has already taken two tests and passed both.”
Father Michael, who doesn't have any relationship with his daughter but loves the media attention, said he is "happy" for his daughter.
“I am happy for her. She’s on the straight and narrow. I hope it continues,” said Daddy Lohan.
In other Lohan news Michael and ex wife Dina finally resolved their dispute over child support in a New York court on Thursday.
Michael told X17 Online: “I'm extremely happy with the outcome. I felt it was time to put my feelings aside and do what was right. Dina and I have entered into an agreement. I hope this is a stepping stone for us to be united, not only financially, but as parents. With this behind us, we can now focus on Lindsay."