The relationship between behavior problems and adolescent peer relations was examined in 30 black male adolescents divided into three equal-sized groups on the basis of individual psychosocial functioning (conduct-disordered, anxious-withdrawn, well-adjusted). Groups were matched on age, IQ, and father absence. An observational method was used to evaluate dominance, conflict, affect, and social competence manifested with a friend and with a well-adjusted stranger. Conduct-disordered and anxious-withdrawn adolescents displayed less social competence and less positive affect than well-adjusted adolescents when interacting with both friends and strangers. Anxious-withdrawn adolescents evidenced more personal apprehension than their well-adjusted counterparts. All groups showed greater leadership ability, talked more, and showed less personal apprehension with friends than with strangers. The findings support the role of peer relations in the maintenance and exacerbation of adolescent psychosocial difficulties.