Background: Genetic risk for depressive behavior may increase the likelihood of exposure to environmental stressors (gene-environment correlation, rGE). By the same token, exposure to environmental stressors may moderate the effect of genes on depressive behavior (gene-environment interaction, GxE). Relating these processes to a peer-related stressor in childhood, the present study examined (1) whether genetic risk for depressive behavior in children is related to higher levels of rejection by the peer group (rGE) and (2) whether peer rejection moderates the effect of genetic factors on children's depressive behavior (GxE). Methods: The sample comprised 336 twin pairs (MZ pairs = 196, same-sex DZ pairs = 140) assessed in kindergarten (mean age 72.7 months). Peer acceptance/rejection was measured via peer nominations. Depressive behavior was measured through teacher ratings. Results: Consistent with rGE, a moderate overlap of genetic effects was found between peer acceptance/rejection and depressive behavior. In line with GxE, genetic effects on depressive behavior varied across levels of peer acceptance/rejection. Conclusions: An increased genetic disposition for depressive behavior is related to a higher risk of peer rejection (rGE). However, genes play a lesser role in explaining individual differences in depressive behavior in rejected children than in accepted children (GxE).