Data from an ongoing longitudinal study examined resilience (competent performance under adverse conditions) in a community sample of children of alcoholics (COAs n=216) and matched controls (n=201). The study examined the prevalence of competence and whether the relation of competence to internalizing and positive affect differed for COAs and controls. COAs were less likely to be highly competent in the conduct/rule-abiding and academic domains and more likely to be low competent. Controlling for previous levels of internalizing, highly competent children in the conduct/rule-abiding and overall competence domains endorsed significantly lower levels of internalizing symptomatology. For the social, conduct/rule-abiding, and overall competence domains, competence was associated with increased positive affect. The relation between competence and internalizing, and competence and positive affect did not differ for COAs and controls. Results suggested that behavioral resilience is not associated with psychological costs but is associated with decreased internalizing and increased positive affect.