The study investigated the relationship among peer play discontinuity, social competence and school readiness using data collected from 1,144 five-year old children from the 7th wave of the Panel Study of Korean Children(PSKC). Data were analyzed by means of descriptive statistics, Cronbach’s α, correlation and hierarchical regression analysis to test for the moderating effect of the children’s social competence on the association between peer play discontinuity and school readiness. The results can be summarized as follows. Firstly, all the variables were significantly related to one another. Secondly, according to the results of the interaction analysis between factors, preschoolers’ social competence moderated the effect of preschoolers’ peer play discontinuity on sub-variables of school readiness, including social-emotional development, attitudes towards learning and communication comprehension. Therefore, this study highlighted the importance of fostering social competence in young children so as to experience an appropriate and smooth transition into school life in the future. Practical implications from these findings and suggestions for direction of future research are also discussed.