We examined associations between children's health status and the quality of their peer relationships, as well as factors that may account for individual variation in the quality of chronically ill and healthy children's peer relationships. Our sample included 268 children (138 boys; 130 girls) with 149 European-Americans and 119 African-Americans. There were 91 children with a chronic illness; 35 with asthma, 26 with diabetes, and 30 with obesity. Chronically ill children were characterized by teachers as displaying less prosocial behavior, less overt aggression, and less relational aggression with peers than healthy children. Chronically ill children reported lower levels of peer contact and higher levels of social anxiety than healthy children. Among chronically ill children those with high self-esteem were more prosocial and less aggressive than those with low self-esteem. Our findings suggest that chronically ill children are at risk for peer relationship difficulties, but that self-esteem may serve as a protective factor against poor peer relationships for some chronically ill children.