The authors report that research conducted in the positive psychology movement on self-esteem and family challenge has linked both of these factors to achievement in adolescents, but studies have not simultaneously examined the effects of these factors on achievement. It was found in this study that family challenge and self-esteem were correlated with one another. The effects of each of these factors on achievement while controlling on the other factors were examined. While controlling on self-esteem, family challenge was positively associated with grades in school and was marginally associated with extracurricular participation. Controlling on family challenge, self esteem was not found to be predictive of grades or extracurricular involvement in longitudinal analyses, however, some evidence for a relationship in the opposite direction was indicated with grades in the 10th grade predicting self-esteem in 12th grade. It was also found that differences in academic achievement and extracurricular participation by race/ethnicity are suggested. The four hypotheses upon which this study was based are described. The data used for these analyses came from a 1992-1993 national longitudinal study of adolescent development. Measures used are described, such as, self reports by students, a global self-esteem measure, and a measure of family challenge computed from a previous study. Tables provide information on means comparisons of outcomes of interest; correlations between self-esteem, family challenge, and achievement; OLS regression models predicting self-esteem in 12th grade; OLS regression models predicting academic grades in 12th grade; and OLS regression models predicting extracurricular involvement in 12th grade. In conclusion, the implications of these findings for the role of family challenge and self-esteem in the positive development of adolescents are discussed. A list of source references is included.