This study examined the impact of performance goals on arithmetic strategy use, and how same-sex peer groups contributed to the selection of strategies used by first-graders. It was hypothesized that gender differences in strategy use are a function of performance goals and the influence of same-sex peers. Using a sample of 75 first grade students, data were collected at three time-points throughout the school year. Hierarchical linear regression and repeated measures ANCOVAs indicated that performance goals predicted an increased use of retrieval and cognitive strategies, but only in boys. Accuracy in performance and an increased use of retrieval and cognitive strategies were found in all-boy groups, but not in all-girl groups. The study identifies performance goals and peers as playing a persuasive role in the use of retrieval and cognitive strategies for boys. Neither variable explained girls' preference for manipulative-based strategies.