Effects of the label "mentally retarded" and academic competence on low-income sixth-grade children's attitudes toward peers were examined. Attitude was defined in terms of children's affective feelings and behavioral inclinations. The results showed that low-income children expressed more favorable attitudes toward a competent than an incompetent child and, paradoxically, toward a labeled than a nonlabeled child. The data also revealed that an academically incompetent child who was not labeled as retarded evoked negative attitudes, especially from boys, whereas an incompetent child who was labeled as retarded evoked positive attitudes. The findings were discussed in terms of the pros and cons of the current trend toward delabeling.