A growing literature suggests that juvenile arrests perpetuate offending and increase the likelihood of future arrests. The effect on subsequent arrests is generally regarded as a product of the perpetuation of criminal offending. However, increased rearrest also may reflect differential law enforcement behavior. Using longitudinal data from the Project on Human Development in Chicago Neighborhoods (PHDCN) together with official arrest records, the current study estimates the effects of first arrests on both reoffending and rearrest. Propensity score methods were used to control differences between arrestees and nonarrestees and to minimize selection bias. Among 1,249 PHDCN youths, 58 individuals were first arrested during the study period; 43 of these arrestees were successfully matched to 126 control cases that were equivalent on a broad set of individual, family, peer, and neighborhood factors. We find that first arrests increased the likelihood of both subsequent offending and subsequent arrest, through separate processes. The effects on rearrest are substantially greater and are largely independent of the effects on reoffending, which suggests that labels trigger “secondary sanctioning” processes distinct from secondary deviance processes. Attempts to ameliorate deleterious labeling effects should include efforts to dampen their escalating punitive effects on societal responses.