Classroom peers presumably influence learning by teaching each other. Unfortunately, little is known about peer-to-peer teaching because it is rarely observed in field studies. The efficacy of this teaching likely depends on the ability of one’s peers. We investigate the mechanisms of peer effects experimentally to establish the importance of peer-to-peer teaching and how it is affected by ability tracking–grouping students of similar ability. While peer-to-peer teaching improves learning among low-ability subjects, the positive effects are offset by tracking. Tracking reduces peer-to-peer teaching, suggesting that low-ability subjects suffer from the absence of high-ability peers to teach them.