Conceptual and methodological advances and important empirical findings have led to a remarkable expansion of research on children’s friendships. Peer relations researchers now make clear distinctions between a child’s level of acceptance by peers, whether a child has friends, and the quality of a child’s best friendships. Each of these dimensions of a child’s life with peers has impact on children’s progress in school and on various indicators of emotional well-being, including feelings of loneliness. This chapter describes the contexts in which children’s friendships are studied and the diverse methods and measures used to study friendship-related processes. Special attention is also given to a) the relationship provisions and processes that take place within children’s friendships; b) the role of social-cognitive processes such as expectations, interpretations, and goals in how children respond to key friendship tasks (e.g., resolving conflicts of interest, coping with friendship transgressions); and c) contextual factors in homes and schools as well as cultural factors that affect children’s friendships. The chapter is designed for experienced researchers, researchers starting out in this field, and professionals who work directly with children, design policies that affect children’s lives, and evaluate programs designed to promote healthy peer relationships.