Research on school dropout suggests that the decision to drop out of school is not a sudden or immediate one, but rather the result of a long-term process of withdrawal from school. While school engagement and truancy are among the most prominent constructs to be associated as precursors of school dropout, the relationship between these two constructs needs further analysis. Our study establishes more comprehensive understanding of school engagement and truancy by focusing on students' individual characteristics and their relationships in school, particularly the student-teacher relationship and relationships with peers. It demonstrates that among the individual characteristics the migration background is crucial for school engagement, while the student age is important for truancy. Furthermore, peer-relationships are positively related to students' school engagement, but not to their truancy. Furthermore, a good student-teacher relationship not only has positive impacts on students' school engagement, but is also negatively associated with truancy, while school engagement mediates this path.