Verbal and indirect violence among peers in residential care settings (RCSs) are understudied social problems. This study, based on a sample of 1,324 Jewish and Arab adolescents aged 11-19 in 32 RCSs, examines the prevalence and multilevel correlates of verbal (such as cursing) and indirect (such as social exclusion) forms of victimization by peers in RCSs. Adolescents completed a self-report anonymous questionnaire in their facility. Hierarchical Linear Modeling (HLM) is used to examine the links between adolescents’ victimization, individual-level characteristics (gender, age, adjustment difficulties, self-efficacy, staff maltreatment experiences and perceived institutional social climate), and RCS-level characteristics (setting type of care, size, structure, and ethnic affiliation). Most adolescents reported having been verbally (73%) and indirectly (62%) victimized by their peers at least once in the month prior to filling out the questionnaire. Vulnerability to indirect violence is higher among girls and those with low perception of their social self-efficacy. Younger adolescents, adolescents with higher levels of overall adjustment difficulties, those experiencing high levels of physical maltreatment by RCS staff and those perceiving levels of child friendliness in their RCS as poor, were all more vulnerable to verbal and indirect victimization by peers. Verbal victimization is positively associated with residence in Jewish RCSs and indirect victimization is positively associated with residence in therapeutic settings which contain higher concentrations of vulnerable youth compared with rehabilitative settings. The findings can assist in designing anti-bullying intervention and prevention programs tailored for the at-risk children and institutions identified in the study.