Two studies of a total of 17 preadolescent emotionally disturbed children were undertaken to observe children's reflective and naturalistic social cognition, and to utilize a developmental sequence of levels of interpersonal understanding to evaluate the interpersonal problem solving skills of emotionally disturbed children. Individual interviews were conducted and group meetings were held in small classrooms where the children's discussion centered on common conflicts such as teasing, scapegoating, and distribution of group rewards. Results showed that children's level of reflective social cognition obtained during individual interviews about hypothetical events was at a higher level than their real life interpersonal problem solving. It is concluded that peer pressure, situational anxiety and frustration, which are more prevalent in a group context, may compromise the abilities children express in reflective interviews. (Author/PHR)