This study assessed the importance of teacher preference of individual students, relative to peer rejection and student aggression, as an independent predictor of children's emotional adjustment and grades. First, a longitudinal, cross-lagged path analysis was conducted to determine the patterns of influence among teacher preference, peer rejection, and student aggression. Then, parallel growth analyses were examined to test whether lower initial and declining teacher preference, beyond the influence of initial level and change in peer rejection and student aggression, predicted change in loneliness, depression, social anxiety, and grades. Social adjustment, emotional adjustment, and academic adjustment were assessed in the fall and spring of two consecutive school years with 1193 third-grade students via peer-, teacher-, and self-report instruments as well as school records. In the cross-lagged path analysis, reciprocal influence over time between teacher preference and peer rejection was found, and student aggression predicted lower teacher preference and higher peer rejection. In the growth analyses, initial and declining teacher preference were independent predictors of increasing loneliness and declining grades. Discussion focuses on the relevance of the results within a transactional model of school adaptation. (Contains 4 tables and 1 figure.)