Based on the social investment principle and theories of social relationship differentiation, the present study was conducted to investigate whether personality differences in high school predict young adults' living arrangements (with roommates or a romantic partner, alone, or staying with parents) 2 years later (selection) and whether these different social contexts provoke long-term personality changes (socialization). Using data from a 3-wave longitudinal study of 8,052 high school graduates in Germany, multinomial logistic regression analyses revealed substantial selection effects of the Big Five traits on living arrangements. Propensity score matching was applied to provide a strong test of the socialization effects of these living arrangements. Young adults who lived with roommates showed increases in Openness but the smallest increases in Conscientiousness. Living with a romantic partner was the most beneficial arrangement for the development of Conscientiousness. These results highlight the importance of social contexts for personality development in young adulthood.