Although association with delinquent peers is a recognized precursor to ongoing delinquency problems, youth in the juvenile justice system are commonly prescribed intervention services that aggregate delinquent youth. However, little is known about the process variables that mediate the relationship between aggregating youth in intervention settings and poor subsequent outcomes. We examined data from two randomized intervention trials (one male sample and one female sample) with delinquent adolescents placed either in Multidimensional Treatment Foster Care (MTFC) or in group care. Path analyses suggested that the MTFC youth had fewer associations with delinquent peers at 12 months than did the group care youth. Further, associating with delinquent peers during the course of the intervention mediated the relationship between group condition and 12-month delinquent peer association. Implications for the development of interventions with delinquent youth are discussed. There is little question that youth who socialize with peers who engage in delinquent behavior are at increased risk for delinquency and substance use-related activities (Dishion, 2000;Dishion & Loeber, 1985;Dishion & Medici Skaggs, 2000;Elliott, Huizinga, & Ageton, 1985;Elliott & Menard, 1996;Hawkins, Catalano, & Miller, 1992;Hops, Davis, & Lewin, 1999;Oetting & Beauvais, 1990;Patterson, Dishion, & Yoerger, 2000). For example, using structural equation modeling with a sample of at-risk boys, Patterson et al. (2000) showed a significant path from early involvement with deviant peers to growth in new forms of antisocial behavior from age 10 through age 18; in a second model, they showed that the contribution of early involvement with deviant peers to later growth in new forms of antisocial behavior was mediated by deviancy training assessed at age 14, accounting for 53% of the variance in later growth in new forms of antisocial behavior.In addition, there is accumulating research suggesting that interventions that aggregate at-risk peers together can produce iatrogenic effects (Dishion, McCord, & Poulin, 1999). Dishion and colleagues (1999) examined data from two peer-group intervention studies and found that youth in the experimental group had increased adolescent problem behavior and negative life outcomes in adulthood, whereas youth in the control conditions did not show such effects. Dishion and colleagues suggested that, compared with low-risk youth, high-risk youth may be Despite evidence that peer aggregation can lead to negative outcomes, little is known about which populations are most vulnerable to iatrogenic peer aggregation effects and about which mediating processes link peer aggregation to poor outcomes. In this paper, we focus on the effects of peer aggregation in juvenile justice-referred boys and girls who have participated in a randomized intervention trial designed to reduce delinquency. Youth in the intervention condition participated in Multidimensional Treatment Foster Care (MTFC), where each youth was individually plac...