The validity of the interpersonal cognitive problem solving (ICPS) skills model of children's adjustment was investigated (1) by determining whether ICPS skills demonstrated during preschool predicted teacher ratings of adjustment in school during the next two years and (2) by assessing the objectivity of teacher ratings of adjustment through the use of direct observations of children's behavior. Subjects in the first phase of the study were 23 white kindergarten children who had been administered the preschool interpersonal problem solving (PIPS) test while attending Head Start programs. Total data consisted of Head Start PIPS scores, kindergarten teacher behavior adjustment and social competence ratings for all 23 children, and scores on observation measures taken 1 year later for 14 of the subjects. Results substantially support the predictive validity of the PIPS test. Trends in the data suggest that teachers' perceptions of children's adjustment can be verified by observation and that both teacher perceptions and observable behavior can be predicted by the PIPS test. It is concluded that the ICPS model may prove to be an important assessment and training tool for developing social competence in young children. Measures used are appended. (Author/RH)