Access to clean needles and syringes through needle exchange programs (NEPs) has reduced both high-risk behaviors and the transmission of blood-borne infections among injection drug users (IDUs). However, policies regarding "needle-for-needle" exchange versus unrestricted needle distribution remain controversial. The objective of this study was to compare sources of needles, trends in needle distribution, and the practice of satellite needle distribution (SND) among IDUs in Vancouver and Montreal. SND was defined as receiving a new syringe from another individual through trading, purchasing, borrowing, or being given the syringe outright, or supplying a syringe to another individual through trading, selling, lending, or giving a syringe outright. This was practiced by 46% of IDUs in Vancouver and 50% of IDUs in Montreal. SND was associated with borrowing used injection equipment (adjusted OR [AOR], 2.62; 95% CI: 1.85-3.71), conducting bulk needle exchanges (AOR, 1.85; 95% CI: 1.34-2.54), being married or in a common-law relationship (AOR, 1.85; 95% CI: 1.34-2.54), and regular visits to the NEP (> weekly) (AOR, 1.54; 95% CI: 1.17-2.13). In Vancouver, SND was also associated with borrowing used needles (AOR, 2.07; 95% CI: 1.22-3.52). In these two cities, despite different distribution policies, almost half of the participants reported SND, and this was associated with high risk sharing. The practice of SND appears to be an important mechanism for needle acquisition, especially for those at highest risk for HIV and hepatitis C transmission.