Previous research has suggested that the social interactions parents engage in with their typically developing children are critical to the relationships children form with peers later in development. Fewer studies, however, have investigated the relation between parent and child interactions and peer relations in children with autism. The current study aimed to investigate the relation between parent-child joint attention skills, social competence and friendship quality in children with autism and in typically developing children. A matched sample of 20 preschool-aged children with autism and 20 preschool-aged typically developing children were observed interacting with their parents in a laboratory setting. Approximately one year later, parents filled out a questionnaire assessing their child's social competency and quality of friendships with peers. Results indicated significant group differences between children with autism and typically developing children in all study variables, with children with autism displaying less initiation of joint attention, lower social competence and low quality friendships. Additionally, child initiated joint attention was positively related to social competence for both groups; effects were not moderated by diagnosis status. It is concluded that parent and child interactions during the preschool years are important to the development of social competence with peers. Intervention and policy implications are discussed.