Both sensation seeking and affiliation with deviant peer groups are risk factors for delinquency in adolescence. In this study, we use a sample of adolescent twins (n = 549), 13 to 20 years old (M age = 15.8 years), in order to test the interactive effects of peer deviance and sensation seeking on delinquency in a genetically informative design. Consistent with a socialization effect, affiliation with deviant peers was associated with higher delinquency even after controlling for selection effects using a co-twin-control comparison. At the same time, there was evidence for person-environment correlation; adolescents with genetic dispositions toward higher sensation seeking were more likely to report having deviant peer groups. Genetic influences on sensation seeking substantially overlapped with genetic influences on adolescent delinquency. Finally, the environmentally mediated effect of peer deviance on adolescent delinquency was moderated by individual differences in sensation seeking. Adolescents reporting high levels of sensation seeking were more susceptible to deviant peers, a Person × Environment interaction. These results are consistent with both selection and socialization processes in adolescent peer relationships, and they highlight the role of sensation seeking as an intermediary phenotype for genetic risk for delinquency.