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In this study, the associations between peer effects and academic functioning in middle adolescence (N = 342; 14-15 years old; 48% male) were investigated longitudinally. Similarity in achievement (grade point averages) and unexplained absences (truancy) was explained by both peer selection and peer influence, net of acceptance, and connectedness. Friendships were formed and maintained when adolescents had low levels of achievement or high levels of truancy. Friends influenced one another to increase rather than decrease in achievement and truancy. Moreover, friends' popularity moderated peer influences in truancy in reciprocal friendships but not in unilateral friendships, whereas friends' acceptance moderated peer influences in achievement in both unilateral and reciprocal friendships. The findings illustrate the dynamic interplay between peer effects and academic functioning.