This chapter reviews recent evidence on peer effects in education. We focus on three prominent themes that have emerged over the current decade: (1) the heterogeneity of effects by own and peers’ characteristics, (2) the persistence of peers’ influence in the long run, and (3) the importance of a special type of peers: siblings. We discuss possible pathways and lessons for optimal peer-group design. In our discussion, we highlight the key methodological challenges in this literature, focusing in particular on those related to the definition and measurement of peers.