Accumulating evidence suggests that social contexts in early life have important and complex effects on childhood psychopathology. Spurred by the lack of an explicit operational definition that could guide the study of such effects, we define a social context operationally as “a set of interpersonal conditions, relevant to a particular behavior or disorder and external to, but shaped and interpreted by, the individual child.” Building on this definition, we offer a series of recommendations for future research, based on five theoretically derived propositions: (a) Contexts are nested and multidimensional; (b) contexts broaden, differentiate, and deepen with age, becoming more specific in their effects; (c) contexts and children are mutually determining; (d) a context's meaning to the child determines its effects on the child and arises from the context's ability to provide for fundamental needs; and (e) contexts should be selected for assessment in light of specific questions or outcomes. As reflected in an increasingly rich legacy of literature on child development and psychopathology, social contexts appear to influence emerging mental disorders through dynamic, bidirectional interactions with individual children. Future research will benefit from examining not only statistical interactions between child- and context-specific factors, but also the actual transactions between children and contexts and the transduction of contextual influences into pathways of biological mediation. Because adverse contexts exert powerful effects on the mental health of children, it is important for the field to generate new, more theoretically grounded research addressing the contextual determinants of psychological well-being and disorder.