The purpose of this study was to examine: (a) the role of teacher talk in promoting peer interaction, (b) the adequacy of social IEP objectives to reflect children's social functioning and guide provision of teacher talk, and (c) differences in children's peer interaction and teacher talk in inclusive and segregated settings. Thirty children with disabilities and their teachers participated. Overall, we observed low rates of teacher talk thought to support peer interaction; however, when teachers verbally facilitated peer interaction, children were observed interacting more frequently with peers. Children's social IEPs accurately reflected their current level of social functioning. However, the social IEPs appeared to fail to influence teacher intervention. Finally, children with disabilities in inclusive settings interacted with peers more than children in segregated settings, even though there was no significant difference in amount of teacher talk in the two settings.