The development of competence holds great interest for parents and society alike. This article considers implications from research on competence and resilience in children and adolescents for policy and interventions designed to foster better outcomes among children at risk. Foundations of competence in early development are discussed, focusing on the role of attachment relationships and self-regulation. Results from studies of competence in the domains of peer relations, conduct, school, work, and activities are highlighted. Lessons are drawn from studies of naturally occurring resilience among children at risk because of disadvantage or trauma and also from efforts to deliberately alter the course of competence through early childhood education and preventive interventions. Converging evidence suggests that the same powerful adaptive systems protect development in both favorable and unfavorable environments.