Recent studies of school-age children and adolescents have used social network analyses to characterize selection and socialization aspects of peer groups. Fewer network studies have been reported for preschool classrooms and many of those have focused on structural descriptions of peer networks, and/or, on selection processes rather than on social functions of subgroup membership. In this study we started by identifying and describing different types of affiliative subgroups (HMP- high mutual proximity, LMP- low mutual proximity, and ungrouped children) in a (...) sample of 240 Portuguese preschool children using nearest neighbor observations. Next, we used additional behavioral observations and sociometric data to show that HMP and LMP subgroups are functionally distinct: HMP subgroups appear to reflect friendship relations, whereas LMP subgroups appear to reflect common social goals, but without strong, within-subgroup dyadic ties. Finally, we examined the longitudinal implications of subgroup membership and show that children classified as HMP in consecutive years had more reciprocated friendships than did children whose subgroup classification changed from LMP or ungrouped to HMP. These results extend previous findings reported for North American peer groups. (shrink)