Peer associations within schools are important influences on educational orientations and aspirations. The many studies in this area, however, have not produced a comprehensive and detailed theoretical account of peer socialization effects, thereby impeding the design and implementation of more effective school organizations. Although schools provide differentiated settings and activities which affect peer interaction patterns, it is questionable to assume that the most important settings for these interactions are consonant with school organizational boundaries such as the entire school, curricular tracks, or classroom. Informal peer groups, not necessarily defined by classrooms, are important sources of influence on students as demonstrated by social network analysis. There is a need to develop a more adequate conceptualization of how school organization affects peer social structures and processes by investigating factors of academic achievement, friendships, school size, and extra-curricular activities. (Author/HLM)