This issue examines the specific role children's experience of friendship plays in their psychological adjustment, and shedding light on the neglected area of peer relations research. The authors discuss the theory and empirical work connecting friendship and adjustment that provides a firm foundation for peer relations research. The authors present the results of an eighteen-year study addressing the question of whether acceptance and friendship are unique or redundant predictors of adult adjustment and well-being. They address the peer relationship difficulties experienced by children suffering from attention deficit/hyperactivity disorder; and they examine the potential iatrogenic consequences in the treatment of groups targeting antisocial youth. This volume also offers an informative and provocative essay tracing the conceptual and historical foundations of research and discussing the recent rise of interest in the peer system. This is the 91st issue of the Jossey-Bass series New Directions for Child and Adolescent Developmnet.