ABSTRACT-Prior work indicates that preschoolers (ages 4-5) maintain high self-appraisals and behavioral engagement after performing less well than their peers. This study tested the hypothesis that relative failure has more negative consequences for preschoolers when they interpret achievement differences as being tied to membership in social categories (e.g., when members of different categories have different achievement levels), as opposed to variations in individual effort. Preschoolers (N 5 58) were randomly assigned to receive feedback that a same-gender, other-gender, or gender-unidentified peer performed better than they did on a novel task. Experiences of failure relative to other-gender peers resulted in impaired performance on a subsequent task trial, as well as lack of improvement in self-evaluations after children received more positive feedback. These findings have implications for the origins of social comparisons, category-based reasoning, and the development of gender stereotypes and achievement motivation.During the preschool years, children rapidly learn a wide range of new skills and inevitably will have experiences in which they do not perform as well as their peers. How do these experiences of relative failure influence children's self-appraisals and behavior? For older children and adults, performing less well than peers often results in lower self-evaluations and poorer subsequent performance (e.g., Mussweiler, 2003;Ruble, Eisenberg, & Higgins, 1994). In contrast, previous research suggests that preschool children show high self-appraisals and continued task engagement after experiences of relative failure (Ruble, 1983). In the present study, we hypothesized that preschoolers' responses to relative failure critically depend on the social-category identity of the comparison peer, and demonstrate that failure relative to other-gender peers leads to decreased task performance and lower self-evaluations among preschoolers.Preschoolers (ages 4-5) have been described as immune to the negative effects of relative failure based on findings that they maintain positive self-appraisals and high levels of task-focused effort after they compare their work with that of better-performing peers (i.e., after upward social comparisons; Boggiano & Ruble, 1979;Pomerantz, Ruble, Frey, & Greulich, 1995;Ruble, Boggiano, Feldman, & Loebl, 1980;Ruble et al., 1994;Ruble, Feldman, & Boggiano, 1976;Ruble, Parsons, & Ross, 1976). In one exception, Butler (1998) found that preschoolers rated their own work more negatively after they received concrete evidence that they performed worse, as opposed to better, than a samegender peer. Butler's results impressively demonstrate that preschoolers understand social comparisons and incorporate comparative information into their performance appraisal. However, the implications of these findings for how preschoolers respond to relative failure are limited in two ways. First, because this research compared how children respond to relative success versus relative failure, these da...