This impressive, ambitious, complex proposal will investigate some of the most important features of the family's impact on the development of competence in children. More specifically, the work will examine the impact of parent-child interactions on peer relationships, the effects of parental supervision on children's peer interactions, and the role of the parent as provided of opportunities for peer interaction. A short term longitudinal study will be conducted over a 4 year period to study these issues, when children are in grades K-3. Observational and interview measures of family function will be taken yearly as will measures of familial management of peer relationships. The research promises to tell us much about the effects of different parenting styles and family climate on the development of social competence. This proposal promises to address issues of important theoretical and practical concern, and to provide crucial information of the manner in which families produce children who are capable, or less capable, of forming social relationships that work for their own good, and the good of others in the society.