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This study sought to examine racial and socioeconomic differences in the quality of peer relationships, and the role school and neighborhood factors play in explaining these differences. Utilizing data from the Early Childhood Longitudinal Study (ECLS-K, 2010-11), this study answered three main questions. First, were there racial, ethnic, and socioeconomic differences in peer relationship quality among fifth graders? Second, did attending schools with higher levels of neighborhood violence and lower percentages of students from the surrounding neighborhood reduce the quality of friendships? And if so, did these neighborhood-school factors explain any of the race and class differences in peer relationship quality? The analytic sample consisted of 7,865 fifth grade students, with 13 percent Black and 25 percent Hispanic students. A quarter of fifth graders attended schools where the principal reported neighborhood violence was a problem and approximately 20 percent of fifth graders attended schools where a small percentage (≤13%) of students were from their residential neighborhood. Table 2 presents preliminary results from a hierarchical linear regression analysis predicting teacher reports of peer relationship quality. Results show significant differences in peer relationship quality between racial, ethnic, and socioeconomic groups. Black and low SES students have poorer quality peer relationships compared to White and working or middle class students, respectively. Overall, attending schools where violence was a problem resulted in significantly poorer peer relationships, though this difference became non-significant once neighborhood school was controlled. Students who attended a low neighborhood school, defined as schools where less than 13% of students were from the surrounding neighborhood, had poorer quality peer relationships compared to students who attended schools with a moderate or high percent of students from their own neighborhood. These results suggest that attending elementary schools where a low percentage of students are from the neighborhood may significantly lower the quality of peer relationships overall and may be important in explaining the lower quality of peer relationships among Black students compared to White students. Further analysis is underway to examine the complexities of these preliminary findings including adding controls for school level characteristics such as urbanicity, size, race and poverty composition and region, as well as exploring interactions between gender, race, poverty, neighborhood violence, and neighborhood school. Since fifth grade students may be better at assessing their own connectedness to other students, we are also exploring student reports of friendship quality and loneliness to determine whether the results differ from teacher reports. The preliminary results suggest attending schools where the majority of the students are not from the neighborhood may have important negative impacts on students’ abilities to develop high quality friendships. As alternative schools of choice increase in popularity, this work highlights the need to consider how school composition may be an added factor to consider when examining students’ ability to form meaningful attachments to same-age peers. These preliminary findings point to the need for researchers to unpack how attending schools with low percentages of students from the neighborhood may be particularly salient for low-income and racial minority students.