Social capital is generally considered beneficial for students' school adjustment. This paper argues that social relationships among pupils generate social capital at both the individual and the class levels, and that each has its unique effect on pupils' performance and well-being. The sample in this study consists of 1036 children in 60 first-grade classes in 46 Dutch elementary schools. Multilevel regression results show that a substantial proportion of the variance in school adjustment can be attributed to the class level and that both individual-level and classroom-level social capital have substantial effects on school adjustment. At the individual level, the size of one's network is more important than its structure. At the collective level, social capital also has a "dark side" because it can have negative effects on adjustment, lowering the academic performance in a class.