Youth sport literature contends that the development of self-esteem is influenced by social interactions in the physical domain. However, little research has investigated the role of the peer group in developing perceptions of physical competence and social acceptance. The purpose of this study was to examine the relationship, between competence in physical skills and interpersonal competence with peers in a sport setting. Children (N=126) completed measures assessing perceptions of physical competence and peer acceptance» perceptions of success for athletic performance and interpersonal skills, causal attributions for physical performance and interpersonal success» and expectations for future success in these two areas. Teachers' ratings of children's actual physical ability and social skills with peers were also obtained. Canonical correlation analyses indicated a strong relationship (r^c = .75) between indices of physical competence and peer acceptance. Children who scored high in actual and perceived physical competence and who made stable and personally controllable attributions for sport performance also scored high in actual and perceived peer acceptance and made stable attributions for successful peer interactions.