The Leader-Member Exchange (LMX) approach to leadership emphasizes the interactive nature of the superior-subordinate relationship, asserting that an individual's role in an organization is defined through a series of episodes with the supervisor. Because work-related values are potentially important subordinate characteristics in LMX development, a study was conducted to examine the role that leader and subordinate work values and leader attributions play in the development of supervisor-subordinate relationships. Undergraduate management students (N=111) with either high or low intrinsic and high or low extrinsic work values supervised the work of four theoretical subordinates. The work values of the "subordinates" were also manipulated. Analyses revealed that subordinates with high intrinsic or extrinsic work values were treated with greater negotiating latitude and were assigned more challenging tasks. Attributions for the subordinate's past high performance were more internal and less external when the subordinate had high intrinsic and extrinsic work values and when subordinates had work values similar to those of their leader. Furthermore, attributions for past subordinate performance were found to mediate the effect of work values on leader-subordinate exchanges. These findings suggest implications for organizational effectiveness. (NB)