This study examined (a) the links between children's overly positive perceptions about the relations with the peer group and with their best friend to subsequent behavioral, emotional, and social adjustment, and (b) whether these links are moderated by children's aggression. Using a short-term longitudinal design, the study was based on a sample of 819 4th- to 6th-graders (427 girls) from low to average SES families. Results showed that positive illusions about their social relations with classmates and with friends were related to an increase in children's peer-rated social preference and fostered the stability of children's dyadic friendships, regardless of children's level of aggression. In addition, overestimation of social competence with the peer group and overestimation of friendship quality were both related to a decrease in children's depressive feelings. Extreme overestimation as well as extreme underestimation of social competence with the peer group was also related to an increase in children's aggression. This latter result, however, was only true for children who were highly aggressive to begin with. The theoretical and practical implications of these results are discussed.