This study examined associations between children's health status and the quality of their peer relationships, as well as factors that may account for individual variation in the quality of chronically ill and healthy children's peer relationships. It was expected that chronically ill children would have more social adjustment problems, as well as more negative peer interactions. It was also expected that chronically ill children would be seen as less aggressive than healthy children. Results revealed that chronically ill children were characterized by teachers as having less prosocial and more aggressive relationships with peers than healthy children. Chronically ill children with high self-esteem were more prosocial and less aggressive than their counterparts with low self-esteem. Connections between self-esteem and the quality of peer relationships varied as a function of child sex and race. The findings suggest that chronically ill children are at risk for peer relationship difficulties, but that self-esteem may serve as a protective factor against poor peer relationships for some chronically ill children.