The purpose of this study is to examine whether peer relations within classrooms were related to students' academic progress, and if so, whether this can be explained by students' relatedness and engagement, in line with Connell and Wellborn's self-system model. We analyzed data of 18,735 students in 796 school classes in Dutch junior high schools, using multilevel analysis. Academic progress, conceptualized as regular promotion to the next year versus grade retention, moving upward, and moving downward in the track system, was measured at the time of transition between Grades 1 and 2 (equivalent to US Grades 7 and 8). The results indicated that students who were accepted by their peers had lower probabilities to retain a grade or to move downward in the track system. Although peer acceptance was associated with relatedness and engagement, these variables did not explain why peer acceptance was associated to academic ☆ This article is based on the findings presented in an unpublished doctoral thesis (Lubbers, 2004). ⁎ Corresponding author. Tel.: +31 50 363 6680; fax: +31 50 363 6670. E-mail addresses: M.J.Lubbers@rug.nl (M.J. Lubbers), M.P.C.van.der.Werf@rug.nl (M.P.C. Van Der Werf), T.A.B.Snijders@rug.nl (T.A.B. Snijders), B.M.P.Creemers@rug.nl (B.P.M. Creemers), H.Kuyper@rug.nl (H. Kuyper). 0022-4405/$ see front matter © 2006 Society for the Study of School Psychology. Published by Elsevier Ltd. All rights reserved. doi:10.1016/j.jsp.2006.07.005 492 M.J. Lubbers et al. / Journal of School Psychology 44 (2006) 491–512 progress. Furthermore, peer acceptance and relatedness were more strongly related in classes with more negative class climates. © 2006 Society for the Study of School Psychology. Published by Elsevier Ltd. All rights reserved.