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Despite empirical findings that prosociality can prevent elementary and secondary school students from developing psychological maladjustment, little is known about the underlying mechanisms. The goal of the present study was to examine the mediating effects of peer preference and self-perceived social competence on the associations between prosociality and psychological maladjustment (i.e., depressive symptoms and loneliness). Participants were 951 students (Mage = 11 years, 442 girls) in Grades 3~7 from Shanghai, China. They completed peer nominations of prosociality and peer preference and self-report measures of self-perceived social competence, depressive symptoms, and loneliness. Multiple mediation analyses revealed that: (a) both peer preference and self-perceived social competence mediated the relations between prosociality and psychological maladjustment, and (b) a serial indirect pathway (i.e., prosociality → peer preference → self-perceived social competence → psychological maladjustment) emerged when controlling for age group and gender. These findings point to potential targets in the prevention and intervention of Chinese students’ internalization of problems.