Exclusion and victimization by classmates were related to levels and diurnal change in cortisol in 97 fourth graders (53% boys, M = 9.3 years). Number and quality of friendships were considered as moderators. Salivary cortisol was collected 5 times daily on 2 school days. Excluded children had elevated cortisol levels at school and a flattened diurnal cortisol curve, suggesting hypothalamic–pituitary–adrenocortical (HPA) axis dysregulation. This effect was weaker for children with more friends or better friendships. Victimization was not associated with cortisol level or change. The results demonstrate the role of HPA activity in peer group processes and indicate that group and dyadic factors interact in predicting stress in the peer group.