Available evidence indicates that a substantial majority of young children with intellectual delays exhibit special problems in forming peer relationships and developing friendships. This increased social isolation from peers poses a considerable threat to their mental health in both the short and long term. This problem is related to but extends far beyond expected difficulties based on the increased level of behavior disorders evident for children with intellectual delays. Contemporary evidence suggests that children's peer-related social competence based on both emotion-regulation and social-information processes contributes to their peer relationship difficulties. A number of practice and policy suggestions are outlined to address this critical problem.