Adolescents who lack traits valued by peers are at risk for adjustment difficulties but the mechanisms responsible for deteriorating well-being have yet to be identified. The present study examines processes whereby low athleticism and low attractiveness give rise to adolescent adjustment difficulties. Participants were public middle school students (ages 10 to 13 years, Mage = 11.54, SDage = 1.00) in the USA and Lithuania (300 girls, 280 boys; 52.7% girls). Self-reports of alcohol misuse and loneliness were collected three times during an academic year (M = 12.3 week intervals). Athleticism, attractiveness, unpopularity, and peer rejection were assessed through peer nominations. Full longitudinal mediation analyses examined direct and indirect pathways from stigmatized traits (i.e., low athleticism, low attractiveness) to adjustment difficulties (i.e., alcohol misuse, loneliness) through two indices of low peer status: unpopularity and rejection. The results indicated that the possession of stigmatized traits predicted escalating unpopularity, which, in turn, predicted increasing adjustment difficulties. Similar indirect associations did not emerge with rejection as a mediator, underscoring the unique role of power and prominence (and the lack thereof) in socioemotional development. The findings underscore the adjustment risks and interpersonal challenges that confront children and adolescents who lack traits valued by peers.