This study examined the controversial practice of grade retention and children's academic and behavioral adjustment using data from the Quebec Longitudinal Study of Kindergarten Children. We employed an autoregressive modeling technique to detect the impact of being held back during primary school on subsequent academic performance and behavioral development until age 12 years. The results indicate both a short- and long-term negative influence on academic performance for boys and girls. Children's anxious, inattentive, and disruptive behaviors persisted and, in some cases, worsened after grade retention. These prospective associations were long lasting and more pronounced when grade retention occurred early in primary school. Boys were more vulnerable to the negative influence of grade retention on academic performance and classroom disruptiveness. Disruptive behavior in girls was comparatively less associated with long-term consequences than boys. Nevertheless, girls experienced both short- and long-term academic performance problems in the aftermath of grade retention. Children's prosocial behavior appeared unaffected by grade retention. These results are independent of what would have been expected by the natural course of academic and behavioral development.