Data gathered over the course of a longitudinal study of a birth cohort of over 900 New Zealand children were used to examine factors associated with the formation of affiliations with delinquent or substance using peers in adolescence (15 years). The findings of this study include: (1) Adolescent peer affiliations were associated with a wide range of prospectively measured social, family, parental, and individual factors. This analysis indicated that those children most at risk of forming deviant peer affiliations were those from socially disadvantaged backgrounds, dysfunctional families, who showed early onset conduct problems and other difficulties. (2) Regression analysis suggested that specific factors that were associated with increased risks of later deviant peer affiliations included family socioeconomic status, parental conflict, mother/child interaction, childhood sexual abuse, parental alcoholism, parental criminal offending, parental illicit drug use, parental smoking, early conduct problems, early anxiety/withdrawal, and early smoking experimentation. It is concluded that peer affiliations in adolescence are shaped by a complex social, family, and individual process that includes social stratification, family functioning, and individual behavioural predispositions.