Direct experiences with peers of different races create possibilities for cross-race friendships and reduce racial prejudice and bias. Yet, interracial friendships remain rare in childhood, and decline by early adolescence. Therefore, an essential avenue for research in developmental science is to understand the conditions under which positive interracial encounters are maintained in childhood and adolescence, as these experiences may combat prejudicial attitudes and mitigate discriminatory behavior later in life. Children’s and adolescents’ willingness to engage in interracial peer encounters is not unidimensional, and research targeting how children and adolescents reason about interracial peer encounters provides a window into expectations about these relationships. The present dissertation includes a collection of three empirical papers that each explore contextual factors that influence children’s evaluations, predictions, and preferences in interracial peer encounters. Empirical Paper 1 disentangled children’s evaluations of interracial and interwealth exclusion using a design that focused either on race, controlling for wealth, or wealth, controlling for race. Empirical Paper 2 investigated how children’s and adolescents’ own racial group memberships influenced their predictions and preferences for interracial inclusion within a multi-group context that included information about wealth. Empirical Paper 3 examined the effect of parental and peer messages on children’s and adolescents’ predictions of interracial inclusion. Together, these papers provide evidence that during the interracial peer encounter, the presence of a multi-group context and socializing agents are vital to consider in order to understand, predict, and intervene on children’s and adolescents’ decisions and preferences for interracial peer contact. Discovering the emergence of and age-related changes to attitudes about interracial peer encounters in childhood, and the contextual factors that influence them, will provide valuable information for reducing stereotypes and biases as well as promoting positive peer relationships in childhood.