The purpose of the present study was to examine the role of depressive peer group context in individual social and school adjustment in a sample of 1,430 Chinese adolescents (672 boys, mean age = 15.43 years) from middle (n = 430) and high (n = 1000) schools. Peer groups were identified using the Social Cognitive Map technique. One-year longitudinal data on depression and social and school adjustment were obtained from self-reports, peer nominations, teacher ratings, and school records. Multilevel analyses showed that group-level depression positively predicted later individual depression. Moreover, group-level depression negatively predicted later social competence, peer preference, school competence, and academic achievement, and it positively predicted later peer victimization and learning problems. The results suggest that affiliation with more depressive peer groups contributes to more psychological, social, and school adjustment problems in a cascading manner among Chinese adolescents.