Factors that allow children to maintain socially competent behaviors despite stress were examined among 144 inner-city ninth-grade students with a mean age of 15.3 years. Stress was operationalized by scores on a negative life events scale, and definitions of social competence were based on peer ratings, teacher ratings, and school grades. Moderator variables examined included intelligence, internal locus of control, social skills, ego development, and positive life events. Following theoretical models by Garmezy and Rutter, distinctions were made between compensatory factors (which are directly related to competence) and protective/vulnerability factors (which interact with stress in influencing competence). Ego development was found to be compensatory against stress. Internality and social skills proved to be protective factors, while intelligence and positive events were involved in vulnerability processes. This study also revealed that children labeled as resilient were significantly more depressed and anxious than were competent children from low stress backgrounds.