The present study investigated (1) how social relationships with teachers and peers and self-esteem of students with social-emotional and behavioral difficulties (SEBD) in inclusive regular education (regular schools) and students with SEBD in exclusive special education (special schools) develop over time in comparison with each other and in comparison with their typically developing peers and (2) whether factors--present before students with SEBD received special education services--predicted social-emotional development in either educational setting. Thirty-six "students with SEBD in regular schools," 15 "students with SEBD in special schools," and 1,270 "typically developing" peers participated. We collected data when students with SEBD resided in regular education without additional support, and we followed the development of students with SEBD for 1.5 years with three additional measurements in either school setting. Data of typically developing peers were collected when they resided in a classroom of a participating student with SEBD. Using Bayesian statistics, we found that students with SEBD in special schools had more conflictual relationships with their teachers than typically developing peers, but these relationships improved over time. Students with SEBD in regular schools were less accepted among peers than typically developing students and peer acceptance was stable over time for all three groups. Self-esteem and development in self-esteem over time did not differ between groups. The current study shows that students with SEBD show different developmental trajectories in regular or special schools and that it is difficult to predict their social-emotional development by factors present before students with SEBD received special education services.