This study examines the development of cooperative and negative behavior in a setting in which children of varied ages had regular opportunities for social encounters. Subjects were 16 children, half 16-19 months, half 28-32 months. Each child was observed 30 minutes per day for five days. Behaviors were recorded continuously. A narrative written record was made distinguising child and adult interchanges and specifying who initiated the interchanges. Results centered around the following questions: (1) How do children in the middle of their second and third years differ in their social initiations to peers and adults? (2) How does the age of the peer in the dyad affect these developmental findings? (3) How does the course or dynamics of the interchange relate to the age of the child? Behaviors were organized into two broad categories: prosocial and negative. More prosocial than negative social initiations were observed. More negative behaviors were observed toward peers than adults. Older children showed more prosocial than negative behavior to other 2 1/2 year-old peers. Younger children showed no reliable difference in type of behavior initiated to other 1 1/2 year-old peers. In summary, a basic finding was that the other person in the dyad was a critical component in the social system. (MS)