This book constitutes the refereed proceedings of the 7th International Conference on Extreme Programming and Agile Processes in Software Engineering, XP 2006, held in Oulu, Finland, in June 2006.The 16 revised full papers presented together with 6 experience papers, 12 poster papers and panel summaries were carefully reviewed and selected from 59 submissions. The papers are organized in topical sections on foundation and rationale for agile methods, effects of pair programming, quality in agile software development, issues in large scale agile development, new practices for agile software development, experience papers, posters and demonstrations, and panels.