In the last decade, numerous collaborations between developmentalists and behavior geneticists have extended developmental theories to genetically informative samples. This study integrates the approaches used by behavior geneticists and environmental researchers to further our understanding of the etiology of children’s externalizing behavior. First, I review the genetic and environmental influences on externalizing behavior and describe studies using data from parent reports, self-reports, teacher reports, public records, and observation. Second, I present observational data from a middle childhood twin sample. Results suggest significant dominant genetic effects on observed twin negative behavior during a friend interaction (N = 148 twin pairs). In addition, nonshared environmental effects were substantial; when controlling for the co-participant’s behavior, nonshared environment was the sole source of variation. Context and method effects are discussed.