Research Findings: In early childhood education, the social ecology of the child is considered critical for healthy behavioral development. There is, however, relatively little information based on directly observing what children do that describes the moment-by-moment (i.e., sequential) relation between physical aggression and peer rejection acts in early childhood contexts. Such information could be useful for policy and practice because it may inform specific intervention targets. In this descriptive study, a real-time direct observation protocol was used to measure the frequency of physically aggressive acts and peer rejection acts. The sequential association between directly observed physical aggression and peer rejection acts was examined for 5 high-risk preschool children (Child Behavior Checklist/Teacher Report Form clinical scores) at the beginning (Time 1 [T1]) and end (Time 2 [T2]) of their preschool year. Descriptive analyses showed that both aggression and peer rejection acts increased over the course of the preschool year. Sequential analyses showed that there was a significant (p<.05) increase in the likelihood of physical aggression followed by peer rejection acts from T1 to T2 as indexed by Yule's Q (a transformed odds ratio that controls for differences in the frequencies of children's target behavior). Similarly, there was a significant (p<.05) increase in the likelihood of peer rejection acts followed by physical aggression from T1 to T2. Practice or Policy: Considering the long-term adversity that aggression and related early conduct problems can introduce into the education and social service system, additional studies using direct observation to study early social dynamics between peer rejection acts and physical aggression in at-risk children seem warranted to improve experts' ability to disrupt this developmental trajectory and improve peer relationships.