Children's ratings of competence and relationship quality were used to examine the association between idealized or inflated self-perceptions and level of aggression. Participants were 62 aggressive and 53 nonaggressive second and third graders. Ratings of competence were based on the Pictorial Scale of Perceived Competence and Social Acceptance for Young Children; ratings of relationship quality were drawn from the Social Support Appraisals Scale and the Network of Relationships Inventory. External ratings of competence and relationship quality were obtained from mothers, teachers, and peers. Compared to children who were nonaggressive, aggressive children were more likely to rate personal competence and relationship quality in a perfect or idealized manner and to show less differentiation in their ratings of competence and relationship quality. Aggressive children's self-rated competence and relationship quality were also inflated relative to the ratings made by others, whereas the self-ratings of nonaggressive children tended to be underestimates of their functioning. The tendency for aggressive children to idealize and to inflate ratings of competence and relationship quality was associated with higher levels of aggression. For aggressive children, a highly positive self-view is construed—not as a protective factor or measurement error — but as a defensive posture that places the child at added risk and that impedes the progress of psychosocial interventions.