A definition and typology of peer assessment between students in higher education is proposed, and the theoretical underpinnings of the method are discussed. A review of the developing literature follows, including both process and outcome studies. This indicates that peer assessment is of adequate reliability and validity in a wide variety of applications. Peer assessment of writing and peer assessment using marks, grades, and tests have shown positive formative effects on student achievement and attitudes. These effects are as good as or better than the effects of teacher assessment. Evidence for such effects from other types of peer assessment (of presentation skills, group work or projects, and professional skills) is, as yet, more limited. Computer-assisted peer assessment is an emerging growth area. Important factors in successful implementation are summarized, and recommendations for future research and practice are made.