Video footage posted on the internet show the 18-year-old singer-and-actress inhaling smoke from a bong – a filtration device for smoking - at a party held at her Los Angeles home on November 28, before bursting into giggles.
According to gossip website TMZ, the smoke comes from a natural herb called salvia, which has psychedelic qualities.
In the clip, Miley takes a hit then says: “OK I'm about to lose it now. I'm having a little bit of a trip right now."
With music blaring in the background, the ‘Last Song’ star later mistakenly identifies one of the party guests as her former boyfriend Liam Hemsworth.
She laughs: "Oh my God! He looks so much like him! He looks so much like Liam. Is that me tripping? He doesn't look like Liam at all? Dude, that looks just like Liam!"
It is believed the footage was stolen or copied from a camera belonging to a friend of Miley’s.
The former ‘Hannah Montana’ star’s “honorary godmother” Dolly Parton recently admitted she was worried about the people influencing the teenage star’s behaviour.
Dolly said: "I think she's just in a crosswind trying to overcome the 'Hannah Montana' little girl and trying to become a young woman.
"I don't know if she's surrounded by people that are helping her to not make the wise decisions..."