The goal of this study was to explore relations between teacher characteristics (i.e., competence and wellbeing); social classroom relationships (i.e., teacher-child and peer interactions); and children's social, emotional, and behavioral classroom adjustment. These relations were explored at both the individual and classroom levels among 414 children with emotional and behavioral disorders placed in special education. Two models were specified. In the first model, children's classroom adjustment was regressed on social relationships and teacher characteristics. In the second model, reversed links were examined by regressing teacher characteristics on social relationships and children's adjustment. Results of model 1 showed that, at the individual level, better social and emotional adjustment of children was predicted by higher levels of teacher-child closeness and better behavioral adjustment was predicted by both positive teacher-child and peer interactions. At the classroom level, positive social relationships were predicted by higher levels of teacher competence, which in turn were associated with lower classroom levels of social problems. Higher levels of teacher wellbeing were directly associated with classroom adaptive and maladaptive child outcomes. Results of model 2 showed that, at the individual and classroom levels, only the emotional and behavioral problems of children predicted social classroom relationships. At the classroom level, teacher competence was best predicted by positive teacher-child relationships and teacher wellbeing was best predicted by classroom levels of prosocial behavior. We discuss the importance of positive teacher-child and peer interactions for children placed in special education and suggest ways of improving classroom processes by targeting teacher competence.