The actress is currently undergoing a rehab treatment program at the Betty Ford Clinic in Los Angeles and according to website RadarOnline.com, she has a dependency for the Class A drug.
A source said: "Lindsay`s primary problem is cocaine. She went through a thorough assessment, and it was discovered that she has a high dependence for cocaine."
Lindsay - who has previously confessed to experimenting with the drug - is believed to be doing well in the clinic and responding well to treatment.
The source said: "At this point, Lindsay is at a critical point of her detoxification and recovery, and she is doing well."
Lindsay, 24, has her own treatment team in the facility which is comprised of a personal physician, nurse, psychologist, primary counsellor, case manager, spiritual care counsellor, family counsellor, dietician, fitness trainer and chemical dependency technician.
As well as organising her care plan they are also responsible for drawing up her post-care programme.
Lindsay is due in court on October 22 for a probation hearing, after she failed two drugs tests last month.
The `Mean Girls` actress - who served 13 days of a 90-day jail term behind bars in July - returned to prison following the failed tests, but ended up spending just a matter of hours behind bars after posting $300,000 bail. She then voluntarily checked into the Betty Ford Clinic.
The next hearing could see her jailed again for violating the terms of her probation for a 2007 driving under the influence (DUI) conviction.