The validity of a developmentally based life-stress model of depression was evaluated in 88 clinic-referred youngsters. The model focused on (a) the role of child-environment transactions, (b) the specificity of stress-psychopathology relations, and (c) the consideration of both episodic and chronic stress. Semistructured diagnostic and life-stress interviews were administered to youngsters and their parents. As predicted, in the total sample child depression was associated with interpersonal episodic and chronic stress, whereas externalizing disorder was associated with noninterpersonal episodic and chronic stress. However, the pattern of results differed somewhat in boys and girls. Youngsters with comorbid depression and externalizing disorder tended to experience the highest stress levels. Support was obtained for a stress-generation model of depression, wherein children precipitate stressful events and circumstances. In fact, stress that was in part dependent on children's contribution distinguished best among diagnostic groups, whereas independent stress had little discriminative power. Results suggest that life-stress research may benefit from the application of transactional models of developmental psychopathology, which consider how children participate in the construction of stressful environments.