The contributions of peer interaction to the development of social competence in kindergarten children are discussed in terms of research findings and implications for teachers. Using naturalistic methodology, social behavior was studied by observing interactions among children in classroom settings without direct adult supervision. In peer interactions, children were seen accomplishing social goals in three domains: affiliation goals, competence goals, and status goals. Examples of peer interactions in these three areas are described and serve as a basis for teachers in understanding social interaction in their classrooms, new ways of thinking about children's motives and values, and alternative frameworks for planning and implementing classroom activities. Four sets of teacher roles which may help teachers organize their decisionmaking about social development in their classrooms are given: (1) establishing classroom social context, (2) modeling appropriate social behavior, (3) coaching appropriate social strategies, and (4) teaching social awareness. (DST)