Using a contextual approach to social skills assessment in the peer group, this study examined the criterion-related validity of contextually relevant social skills and the incremental validity of peers and teachers as judges of children's social skills. Study participants included 342 (180 male and 162 female) students and their classroom teachers (N = 22) from rural communities. As expected, contextually relevant social skills were significantly related to a variety of social status indicators (i.e., likability, peer- and teacher-assessed popularity, reciprocated friendships, clique centrality) and positive school functioning (i.e., school liking and academic competence). Peer-assessed social skills, not teacher-assessed social skills, demonstrated consistent incremental validity in predicting various indicators of social status outcomes; peer- and teacher-assessed social skills alike showed incremental validity in predicting positive school functioning. The relation between contextually relevant social skills and study outcomes did not vary by child gender. Findings are discussed in terms of the significance of peers in the assessment of children's social skills in the peer group as well as the usefulness of a contextual approach to social skills assessment.