We examined the potential benefits and risks a activities: prosocial (church and volunteer activities), ream sports, school involvement, performing arts and academic clubs. Our sample included 1,259 mostly European American adolescents (approximately equal numbers of males and females). First, we explore the link between involvement in these activities and our indicators of positive and negative development Involvement in prosocial activities was linked to positive educational trajectories and low rates of involvement in risky behaviors. In contrast, participation in team sports was linked to positive educational trajectories and to high rates of involvement in one risky behavior drinking alcohol Then, we explore two possible mediators of these associations:peer associations and activity-based identity formation. The evidence supported our hypothesis that group differences in peer associations and activity-based identities help explain activity group differences.