This study investigated the relations among shyness, physiological dysregulation, and maternal emotion socialization in predicting children's social behavior with peers during the kindergarten year (N = 66; 29 girls). For shy children, interactions with peers represent potential stressors that can elicit negative emotion and physiological reactions. Behavior during these contexts can be viewed as adaptive (e.g., playing alone) or maladaptive (e.g., watching other children play without joining in) attempts to regulate the ensuing distress. Whether shy children employ adaptive or maladaptive regulatory behaviors was expected to depend on two aspects of emotion regulatory skill: (1) children's physiological regulation, and (2) maternal emotion socialization. Findings supported the hypotheses. Specifically, shy children with poorer cortisol regulation or have mothers who endorsed a higher level of non-supportive emotion reactions engaged in more maladaptive play behaviors whereas shy children with better cortisol regulation or a high level of supportive maternal emotion reactions engaged in more adaptive play behaviors.