Theory and research on sex differences in adjustment focus largely on parental, societal, and biological influences. However, it also is important to consider how peers contribute to girls' and boys' development. This article provides a critical review of sex differences in several peer relationship processes, including behavioral and social-cognitive styles, stress and coping, and relationship provisions. The authors present a speculative peer-socialization model based on this review in which the implications of these sex differences for girls' and boys' emotional and behavioral development are considered. Central to this model is the idea that sex-linked relationship processes have costs and benefits for girls' and boys' adjustment. Finally, the authors present recent research testing certain model components and propose approaches for testing understudied aspects of the model.