This paper summarizes findings of a 3-year study assessing outcomes for 35 children (preschool to high school aged) with mild to severe disabilities in inclusive educational settings. Additionally, the study looked at "connected" pairs of children--each pair including a child with and a child without a disability. It identified three main areas of friendship outcomes for children with and without disabilities: warm and caring companions; growth in social cognition and self-concept; and development of personal principles. Teachers who wish to facilitate friendships in inclusive settings are encouraged to: (1) recognize and value the importance of social context for all learners; (2) structure learning opportunities that not only teach values, but allow children to experience such values everyday; and (3) provide classroom and instructional structures that foster peer relationships in caring community schools. Researchers are urged to investigate such questions as how schooling experiences affect children's ideas about who they are and how they fit into the community. (DB)