The study examined teacher and peer assessment of 34 mainstreamed educable mentally retarded (EMR) children in grades 3 through 6 in nine public schools in central Illinois. A comparison sample of 34 nonretarded Ss was matched to the EMR Ss on sex, race, and grade level. Children in each S's regular classroom were asked to rate on a five-point scale how much they enjoyed playing with each of their classmates. A sociometric nomination measure assessed children's best friendship choices, while another technique provided peer assessments of children's social behavior. Teachers rated four dimensions of Ss' social behavior with peers: friendly/cooperative, avoidant/withdrawn, bossy/domineering, and aggressive/disruptive. Ss goal orientations in game situations were assessed along with their feelings of loneliness and social dissatisfaction. A series of multivariate and univariate analyses of variance revealed that retarded Ss were significantly lower in sociometric status than nonretarded Ss. Compared to nonretarded Ss, retarded children were perceived as less cooperative, more shy, and were less likely to be named as leaders. Findings confirmed the hypothesis that EMR children are shy and withdrawn rather than aggressive-disruptive. Teacher assessments were consistent with the peer assessment data. Group differences were found in all three goal subscales in measures of goal orientation: Ss appeared to focus on performance aspects of games and potential failure/rejection rather than on the opportunities for social interaction. Finally, as hypothesized, EMR Ss reported feeling more lonely and dissatisfied with their social relationships in school than did the nonretarded Ss. Findings suggested the need to couple environmental manipulations with direct social skills training for the retarded child. (CL)