We examine the association between grade retention and the number of same-grade friendships. Moreover, we investigate the effect of a school’s proportion of retained students on these friendships, and the moderating effect of this school characteristic on the relationship between retention and the number of same-grade friendships. Multilevel analyses on data from 11,759 students in 83 Flemish secondary schools show that secondary school retention is related to a lower number of friendships. Primary school retention is unrelated to friendship quantity in secondary education. Furthermore, students attending schools with a higher percentage of retained students have fewer same-grade friendships. The retention composition also moderates the effect of individual grade retention on the number of same-grade friendships. The implications are discussed.