Transactional models have informed research design and interpretation in studies relevant to developmental psychopathology. Bidirectional effects between individuals and social contexts have been found in many behavioral and cognitive domains. This review will highlight representative studies where the transactional model has been explicitly or implicitly tested. These studies include experimental, quasiexperimental, and naturalistic designs. Extensions of the transactional model have been made to interventions designed to target different aspects of a bidirectional system in efforts to improve developmental outcomes. Problems remain in the need to theoretically specify structural models and to combine analyses of transactions in the parent-child relationship with transactions in the broader social contexts. Longitudinal studies with sufficient time points to assess reciprocal processes continue to be important. Such longitudinal investigations will permit identifying developmental periods where the child or the context may be most influential or most open to change.