Physical education represents a dynamic social space where students experience and interpret physicality in a context that accentuates peer relationships and privileges particular forms of embodiment. This article focuses on girls’ understandings of physicality with respect to the organisation of physical education and more informal social networks. Research exploring the connections between the body, capital, physical activity, and femininity and work on friendship and other social relationships underpin the study. The article draws on findings from ethnographic work involving 12- and 13-year-old girls in a multi-ethnic, mixed comprehensive school in the United Kingdom. The meaning of physicality was interwoven with differences in social status, membership in friendship groups, gender ideologies, and ethnicity. Girls’ interpretations of their experiences centred on their perceptions of the importance of displays of competence and the ways that practices in physical education reinforced and challenged their social networks. Girl-only physical education contexts did not emerge as unproblematic as practices were used to both include and exclude other girls, to reinforce social status and to marginalize others. Girls who were physically skilled and socially valued were able to exercise power and maintain their status through demonstrations of competence and strategies of inclusion and exclusion. Girls’ activity choices and evaluations of physical education related to their own feelings of competence, the potential for positive or negative social interactions, and their ability to acquire and utilize desirable forms of social and physical capital. Implications for teaching include the necessity of incorporating inclusive practices that acknowledge the diverse range of girls’ experiences, interests and needs, the need to reflect on the link between activities and social relationships, the possibility of incorporating space for critical reflection, and the influence of friendships and social networks.