The tendency for people to evaluate themselves more favorably than an average-peer—the better-than-average effect (BTAE)—is among the most well-documented effects in the social-psychological literature. The BTAE has been demonstrated in many populations with various methodologies, and several explanations have been advanced for it. Two essential questions remain conspicuously unanswered in the BTAE literature. The first concerns the extent to which the BTAE can be represented as a social-comparative phenomenon, and the second concerns the role that strategic motivational processes play in self versus average-peer judgments. With regard to the first question, Study 1 provides direct experimental evidence that self versus average-peer judgments are made relationally rather than independently and, further, that self-ratings anchor these relational judgments. Moreover, Study 1 demonstrates that the consequence of this comparison is for judgments of average to be assimilated toward, not contrasted from, self-ratings. Studies 2–4 provide evidence that self-enhancement motives play a moderating role in the outcome of self versus average-peer judgments. We show that for dimensions on which the self is positively evaluated, enhancement motives restrict the extent to which average-peer assimilation occurs (Study 2). But for dimensions on which the self is negatively evaluated, enhancement motives amplify average-peer assimilation (Studies 3 and 4). Discussion focuses on the function of such differential assimilation, the relation of the current findings to extant perspectives, and directions for future research. (PsycINFO Database Record (c) 2010 APA, all rights reserved)