Cicchetti and Lynch have conceptualizedecological contexts as consisting of nested levels with varying degrees of proximity to theindividual. These levels of the environment interact and transact with each other over time inshaping individual development and adaptation. With a sample of maltreated (n =188) and nonmaltreated (n = 134) children between the ages of 7 and 12 years, thisinvestigation employed a 1-year longitudinal design to conduct an ecological-transactionalanalysis of the mutual relationships among community violence, child maltreatment, andchildren's functioning over time. Indicators of children's functioning wereexternalizing and internalizing behavior problems and self-rated traumatic stress reactions,depressive symptomatology, and self-esteem. Either full or partial support was obtained for thestudy's primary hypotheses. Rates of maltreatment, particularly physical abuse, wererelated to levels of child-reported violence in the community. In addition, child maltreatment andexposure to community violence were related to different aspects of children'sfunctioning. Specific effects were observed for neglect and sexual abuse and for witnessing andbeing victimized by violence in the community. Finally, there was evidence that children andtheir contexts mutually influence each other over time. Results were discussed within theframework of an ecological-transactional model of development.