Research has only recently begun to examine how callous-unemotional (CU) traits interact with contextual factors to predict delinquent behavior. The current study attempts to explain the well-established link between CU traits and offending by testing the potential mediating and moderating roles of 2 critical contextual factors: peer delinquency and the quality of the parent-adolescent relationship among a sample of 1,216 male juvenile offenders. Youth in the study were interviewed once every 6 months and in the current analyses, CU traits measured at baseline, parenting and delinquent peer association measured during the 6-month interview, and offending measured at the 1-year interview were utilized in path analysis. The findings suggested that the effect of CU traits was partially mediated by delinquent peer association. Additionally, it was found that when both parental warmth and supervision were high, this indirect effect through delinquent peer association was no longer significant. The findings highlight the importance of specific aspects of parenting in reducing delinquent peer influence, particularly among youth with high levels of CU traits.