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The present study empirically tests the signaling hypothesis of gang membership, which holds that selection into gangs is in fact a two-way process—people choose gangs, but gangs choose people (Densley, 2012). Signaling refers to the idea that only one party (the prospective gang member) credibly conveys some information about itself to another party (the gang), requiring the latter to “read between signs” to identify those that are trustworthy indicators for gang membership. We merge this line of theory with recent developments in criminology that selection bias is not simply a statistical nuisance to be parsed out of our models in search of experimental gold standards. Panel data are used to fill the gulf between risks and consequences of gang membership, which we contend constitute micro-level gang processes with considerable overlap.