In this article, we test: (a) the relation between school-based extracurricular participation and indicators of positive and negative development across a range of activity contexts, and (b) a mediation model linking activity participation, prosocial peers, and development. Extensive survey information was collected from a predominately White sample of middle class adolescents in 9th, 10th, and 12th grades. Extracurricular participation was related to more favorable academic, psychological, and behavioral adjustment; the pattern of findings differed by activity and outcome. In addition, we documented some support for the hypothesis that the link between extracurricular participation and positive adjustment is partly a function of associating with a prosocial peer group. Implications of these findings and suggestions for future research are presented.