This study examined how peer relationships contribute to young adolescents' adaptation in the face of exposure to community and family violence. It tested hypotheses about peers' role in processes relating exposure to behavioral and psychological outcomes, specifically, aggression and anxiety. Data were collected from 667 middle school students, followed from sixth grade to eighth grade, in a high crime urban school district, and from their parents and classmates. Friends' antisocial behavior mediated the relationship between violence exposure and later aggressive behavior. A bias toward hostile attribution contributed to, but did not alone explain, the relationship. Friends' prosocial behavior failed to moderate the association between exposure and later aggressive behavior. Social acceptance moderated the relationship between exposure and later anxiety when exposure was low, but not when it was high. Peer intimacy/closeness, while demonstrating a direct, inverse effect on anxiety, failed to moderate the association between violence exposure and anxiety.