Social initiative and behavioral control represent two major dimensions of children’s social competence. Cultural norms and values with respect to these dimensions may affect the exhibition, meaning, and development of specific social behaviors such as sociability, shyness-inhibition, cooperation-compliance, and aggression-defiance, as well as the quality and function of social relationships. The culturally guided social interaction processes including evaluations and responses likely serve as an important mediator of cultural influence on children’s social behaviors, relationships, and developmental patterns. In this article, we review research on children’s social functioning and peer relationships in different cultures from an integrative contextual developmental perspective. We also review research on the implications of the macro-level social and cultural changes that are happening in many societies for socialization and development of social competence.