Prior research suggests that heightened emotional reactivity to emotionally distressing stimuli may be associated with elevated internalizing and externalizing behaviors, and contribute to impaired social functioning. These links were explored in a sample of 169 economically-disadvantaged kindergarteners (66 % male; 68 % African American, 22 % Hispanic, 10 % Caucasian) oversampled for elevated aggression. Physiological measures of emotional reactivity (respiratory sinus arrhythmia [RSA], heart rate [HR], and cardiac pre-ejection period [PEP]) were collected, and teachers and peers provided ratings of externalizing and internalizing behavior, prosocial competence, and peer rejection. RSA withdrawal, HR reactivity, and PEP shortening (indicating increased arousal) were correlated with reduced prosocial competence, and RSA withdrawal and HR reactivity were correlated with elevated internalizing problems. HR reactivity was also correlated with elevated externalizing problems and peer rejection. Linear regressions controlling for age, sex, race, verbal proficiency, and resting physiology showed that HR reactivity explained unique variance in both teacher-rated prosocial competence and peer rejection, and contributed indirectly to these outcomes through pathways mediated by internalizing and externalizing problems. A trend also emerged for the unique contribution of PEP reactivity to peer-rated prosocial competence. These findings support the contribution of emotional reactivity to behavior problems and social adjustment among children living in disadvantaged urban contexts, and further suggest that elevated reactivity may confer risk for social difficulties in ways that overlap only partially with internalizing and externalizing behavior problems.