Background: The present study aimed to investigate children's social information processing (SIP) and emotions in the bullying situation, taking into account reactive and proactive aggression. More specifically, we investigated the way in which children interpret social information, which goals they select, how they evaluate their responses and which emotions they express in hypothetical situations. Method: The participants comprised 242 Dutch children (120 girls and 122 boys; mean age: 117.2 months), who were assigned by means of peer nominations (Salmivalli, Lagerspetz, et al., 1996) to one of the following roles: bully (n = 21), follower of the bully (n = 38), victim (n = 35), defender of the victim (n = 48), outsider (n = 52) and not involved (n = 32). Sixteen children (including 3 bully/victims) were not given any role. The reactive and proactive aggression scale (Dodge, & Coie, 1987) was filled out by teachers in order to test the association between these types of aggression and involvement in bullying. Children were presented with ambiguous scenarios and responded to questions about attribution of intent, goal selection and emotions (anger and sadness). In addition, two questionnaires were administered to children: one assessed perceived self-efficacy in performing aggression, inhibiting aggression and using verbal persuasion skills, and the other assessed expected outcomes from behaving aggressively or prosocially. Results: Results showed that while reactive aggression was common in bullies and victims, proactive aggression was only characteristic of bullies. Both bullies and victims, compared to the other children, scored higher on hostile interpretation, anger, retaliation and ease of aggression. Bullies and followers claimed that it was easy for them to use verbal persuasion, while victims turned out to be the saddest group. All children, irrespective of their role in the peer group, thought that aggressive as well as prosocial behavior was more likely to produce desired results from a friendly peer than from an aggressive one. Conclusions: Bullies and victims seem to be similar in reactive aggression, SIP, and in the expression of anger, but the motivations which lead to their behavior may be different, as well as the final outcomes of their acts. © Association for Child Psychology and Psychiatry, 2004.