As children enter kindergarten, their social adjustment is partially determined by the degree to which they can negotiate and maintain new relationships, become engaged rather than withdrawn from peer-group activities, and behave in prosocial rather than aggressive or antisocial ways (Earth & Parke, 1996; Ladd, 1996). Indeed, the success with which children negotiate the interpersonal challenges associated with school transition will have life-long implications for their mental health (Bagwell, Newcomb, & Bukowski, 1998; Hodges, Boivin, Vitaro, & Bukowski, 1999), scholastic attainments (Alexander, Entwisle, & Dauber, 1993; Wentzel & Caldwell, 1997), and later social relationships (Ladd, Kochenderfer, & Coleman, 1997). Although it is clear that family affective relationship factors provide important contextual influences on children’s social adjustment (Goodman, 2002; Sheeber, Hops, Alpert, Davis, & Andrews, 1997), little is known about the specific processes by which problematic or competent outcomes are established. Rather, findings show more generally that “bad environments” are associated with “bad outcomes” and “good environments” are associated with “good outcomes.”