Results of the study indicate that high academic achievement and healthy adolescent psychosocial adjustment are positively facilitated through the congruence of well-differentiated family and school contexts. It is suggested that having high differentiation levels in both home and school domains is optimal for healthy psychosocial and academic outcomes, whereas adolescents who have low differentiation in both family and school environments are the most vulnerable of these groups. The environmental congruence of family and school relationships and the effects it has on adolescent development are areas where research should continue. The major task of this study was to understand the reciprocal influences of the family-school connection. The overlapping roles of the family and the school have not been clearly delineated in past research. The study applies the construct of differentiation to the school environment, as well as the family. The assumption is that the school environment can be characterized by a level of differentiation, and that optimal adolescent adjustment occurs when both the family and the school environment are characterized by high levels of differentiation. Dynamic stability of ecological niches was examined within the construct of differentiation. Adolescents were coded as experiencing dynamic stability or instability. Specifically, adolescents who scored high on levels of autonomy and connectedness across both contexts were coded as matched. Those who scored high in one environment and low in another environment were coded as mismatched. The match-mismatch coding systems helped as an environmental congruence model. The study consisted of 693 middle and high school students assessing the relationships among levels of family and school differentiation to the externalizing and internalizing behaviors, peer group membership, and academic achievement. Tables, figures, references