The aim of this study was to further understanding of development during the crucial second year of life. The study employed a naturalistic, semistructured situation for the observation of mother-child behavior. The experimental stimulus was the progressive diversion of the mother's attention away from her child. This diversion evoked separation anxiety in the child and the individual and interactive regulatory behaviors of the mother-child pair. Concurrently, the child's behavior was observed in a play group situation. One set of rating scales was devised for assessment of the mother-child interaction, and another set for assessment of the child's functioning in the play group. The major hypothesis was that maternal and child behaviors that foster the child's successful handling of phase-specific stresses and developmental tasks will be positively correlated with the child's functioning in the play group. This hypothesis is supported by the findings of the study.