Children's interest in other children begins to emerge around 6 months of age and, with increasing age, their social involvements with individuals and groups become more frequent and multi-faceted, suggesting that such interactions are of considerable importance to them. On this basis, it is plausible that the experience of peer rejection, or even the threat of rejection, would have the potential to impact greatly on their social, emotional, and cognitive functioning. However, although observational and correlational research has confirmed this speculation, many questions remain concerning the impact of particular aspects of rejection episodes (e.g., by whom, where, how, for what reason, how frequently, etc.), over both the short- and longer term. In this chapter, research on the basis of children's social group membership (i.e. similarity, social distinctiveness, acceptance and belonging) is briefly reviewed, as well as findings that have illuminated the important influence exerted on children by their peer group memberships. The nature and effects of both immediate and chronic peer group rejection on children are considered, drawing on both correlational and experimental research. As well, one mechanism that has been proposed to underpin chronic rejection, rejection sensitivity, is considered and research findings are outlined indicating that the rejection sensitivity model might provide an account of the impact of chronic rejection experiences on young children, especially their social withdrawal and solitude. Some potentially fruitful future research directions on the social phenomenon of children's peer group rejection are outlined.