The present study examined sympathetic and parasympathetic indices of autonomic nervous system reactivity as moderators of the prospective association between parental management of peers via directing of youths' friendships and peer adjustment in a sample of typically developing adolescents. Participants included 246 adolescents at Time 1 (T1) [47% boys; 66% European American (EA), 34% African American (AA)] and 226 adolescents at Time 2 (T2; 45% boys; 67% EA, 33% AA). Adolescents were approximately 16 and 17 years old at T1 and T2, respectively. To address study aims, a multiinformant, multimethod longitudinal design was utilized. Skin conductance level (SCL) and respiratory sinus arrhythmia (RSA) were measured during a baseline period and challenge task (star-tracing). Reactivity was computed as a difference score between the task and baseline period. Results from path models revealed that higher levels of mother-reported parental directing predicted decreases in adolescent-reported peer rejection and friends' deviant behavior from T1 to T2 at relatively low levels of physiological arousal in response to challenge (i.e., low SCL reactivity, RSA augmentation). Further, exploratory analyses indicated that directing was associated with decreases in friends' deviant behavior and peer rejection particularly among boys who exhibited lower levels of physiological arousal, but increases in friends' deviant behavior among boys who exhibited higher levels of arousal reflected in RSA withdrawal only. Overall, findings are consistent with prior studies revealing the benefits of parental behavioral control for underaroused youth, contributing to the growing literature on the interplay of parenting and physiological factors in the adolescent peer domain.