Very little systematic research has examined the peer relations and social functioning of youngsters with chronic illness. In order to stimulate empirical and clinical interest in this potentially important area of pediatric psychology, the present paper discusses several pertinent tissues. These include (a) the role of peers in disease adaptation and treatment management, (b) specific aspects of diseases or treatments that are likely to have implications for youngsters' social functioning, (c) guidelines for further investigation in this area, and (d) suggestions for incorporating peer/social issues into educational programs and intervention efforts for youngsters with chronic disease. Throughout the discussion, the complex interplay between peer relations and adaptation to chronic illness is highlighted.