Peer corrective feedback (PCF) is a dynamic interaction phenomenon due to its inherently affective and social nature. This chapter reviews research comparing peer interaction with other types of interaction in order to explain the context in which PCF occurs. It discusses interactionist research that has examined interactional patterns during peer interaction. The chapter also discusses socioculturally oriented research as it has revealed social relationships that are specific to interaction between learners and presents empirical evidence showing PCF's effectiveness. It focuses on two features of peer interaction that may define the extent of PCF effectiveness: learners' interaction mindset toward the task and/or interlocutor prior to and/or during interaction and the social dynamics that learners co-construct during peer interaction. The vulnerability of PCF to the learners' affective state and social dynamics between learners underscores the importance of instructional intervention so that PCF affects L2 development positively in a consistent manner.