The positive effect of competent behaviors on academic functioning may outweigh the negative effect of externalizing problems. The current study examined this premise among children with externalizing problems in the early elementary years. Participants were 207 kindergarten through third-grade children and their parents and teachers. Results suggested that children's behavioral competence made a unique contribution to all aspects of academic functioning examined (i.e., academic problems, reading and math achievement) over and above a variety of child background characteristics, including externalizing problems. Furthermore, children's behavioral competence buffered the negative effects of limited parental education on children's reading achievement. That is, among children of parents with less than a college degree, children's reading achievement was higher for those whose behavioral competence was average than for those whose behavioral competence was at risk. Findings highlight the significance of identifying and promoting behavioral competencies when working with children with behavior problems. (Contains 3 tables and 1 figure.)