According to the failure model (Patterson & Capaldi, 1990), peer rejection is the intermediary link between problem behaviors and internalizing symptoms. The present study tested the model with 464 monozygotic and same-sex dizygotic twin pairs (234 female, 230 male dyads). Teacher-reported reactive aggression and internalizing symptoms, and peer-reported peer rejection were collected at ages 6, 7, and 10 (from 2001 to 2008). Support for the failure model emerged in conventional non-genetically controlled analyses, but not twin-difference score analyses (which remove shared environmental and genetic contributions). Univariate biometric models attributed minimal variance in failure model variables to shared environmental factors, suggesting that genetic factors play an important unacknowledged role in developmental pathways historically ascribed to nonshared experiences in the failure model.