This study uses ecological momentary assessment (EMA) to simultaneously capture youths' perceptions of peer affiliates and social contexts to determine their association with youths' current and future mood states. A sample of 82 seventh grade students (36 at risk for developing or escalating rule breaking and substance use and 46 randomly selected) from 4 schools participated. Using EMA methodology, we had students report their peer affiliations, perceptions of peer affiliates, moods, activities, location, and behaviors during their free time. Data from 3 assessment waves were collected; each wave consisted of 27 randomly prompted assessments during a week. Youths spent a large portion of their free time watching television, on the computer, or playing video games. Being "out and about" increased over the school year, whereas adult supervision decreased, showing an increase in potentially risky situations. Happiness was associated with affiliating with peers who were perceived to be popular. Negative moods were associated with affiliating with peers by whom they were teased or treated meanly. Multilevel models found that both levels and lability of negative moods (i.e., sadness, anxiety) were predicted by risk status and affiliation with peers who tease them. Compared with boys, girls who affiliated more with peers who teased them and were classified as at risk had more extreme negative moods and negative mood lability. EMA methodology has demonstrated the ways in which salient intrapersonal and peer processes are associated over time, which can inform efforts to prevent the development and escalation of behavior problems, substance use, and mood disorders in adolescence. (Contains 3 tables and 2 figures.)