Although exposure to adversity places children at high risk for developmental problems, there is considerable variation in the adaptation of children exposed to both low and high levels of adversity. In recent years, researchers have made significant progress in understanding how social environments shape children's development. Studies indicate that not all children are equally susceptible to environmental effects. In this article, we review the studies that examine individuals' sensitivity to both positive and negative contextual influences at three levels of analysis: behavioral, physiological, and genetic. Furthermore, we examine how these different types of sensitivities may be related and whether early exposure to adversity plays an important role in shaping development of individual reactivity to contexts. We also suggest important directions for future studies of individual differences in susceptibility to environmental effects.