Although success in managing evolving peer relationships is linked to critical adolescent outcomes, little is known about the specific factors that lead to success or failure in peer relationship development across adolescence. This longitudinal study examines the role of adolescents' level of ego development as a predictor of the future course of several facets of friendship development in early adolescence. Ego development was assessed in a community sample of adolescents at age 13. Several facets of adolescent friendship were also assessed at 13 and then reassessed 1 year later, including adolescent intimate behavior during a supportive interaction with their best friends, adolescent reports of psychological security in their friendships, and peer-rated popularity. As predicted, ego development not only explained concurrent levels of peer functioning but also predicted markers of change over time in each of the assessed domains of peer functioning. Implications for ego development in increasing our understanding of individual differences in adolescent friendship development are discussed. (Contains 3 tables.)