This study examined relations between behavioral inhibition in toddlerhood and social, school, and psychological adjustment in late adolescence in China. Data on behavioral inhibition were collected from a sample of 2-year-olds (initial N = 247). Follow-up data were collected at 7 years for peer relationships and 19 years for adjustment across domains. The results showed that early inhibition positively predicted later social competence and school adjustment. Peer relationships in middle childhood served as a protective factor in the development of depression of inhibited children. The results indicate the distinct functional meaning of behavioral inhibition in the Chinese context from a developmental perspective.