This study examind the process of forming and maintaining peer relationship by analyzing those conflicts which had occurred in 3 years of preschool period. Three boys in a 3-year-old class were observed longitudinaly in free play sessions, once a week, using VTR and field notes. The results are as follows : 1) The conflicts among children increased numerically from the time when subjects were 3-year-olds to the time when they were 4-year-olds, and then decreased to the level of 3-year-olds when they were 5-year-olds. 2) There were clearly individual differences in the number of conflicts. 3) Peer relationships when conflicts occurred were classified into opposition and cooperation, and the relationships between target childen A and B changed from opposition to opposition-cooperation mixed. 4) Conflicts in their early phase of development occurred mainly when B approachedwith an interest in A, and A rejected B's overture. Later, as they began to play together, conflicts occurred as they tried to manage and maintain their relationships. Toward the end of their second year, they seemed to become to have a awareness that conflicts should be terminated. The two boys' relationships changed through seven phases, which showed dynamic transactional processes.