The contribution peer relationships make to positive adolescent development is well recognized. Accordingly, peer problem measures typically assess youth with few age-appropriate peers as having peer problems. Yet, youth facing high levels of personal and/or social adversity may reduce their association with antisocial peers as part of coping or risk mitigation strategies. While such strategies will result in higher scores on peer problem measures, they may also facilitate resilience and constitute a resource social workers can draw on in their work with youth. To test this proposition of peer adaptation as a risk mitigation strategy, mixed-methods data relating to two groups of youth who were exposed to different levels of adversity were compared on a standardized peer problem measure and a range of risk measures. Qualitative interviews extended this data and explored vulnerable youth perceptions of social withdrawal as a coping strategy. Results from the survey and qualitative data indicated that a subgroup of youth facing high levels of adversity restricted association with antisocial peers to reduce their behavioural risks. However, without adequate support from adults in both formal support systems and youths’ social ecologies to compensate for the loss of peer friendships, this strategy did not reduce behavioural risk in the medium term. The social withdrawal strategy also appeared to heighten mental health concerns for these youth. The implications of this finding for the development of policy and practice with vulnerable youth are discussed.