Aim: Peer teaching, an educational arrangement in which one student teaches one or more fellow students, is applied in several forms in medical education. A number of authors have linked peer teaching to theories of education and psychology. Yet no comprehensive overview of what theory can offer to understand dynamics of peer teaching has been previously provided. Method: A framework is designed to categorize forms of peer teaching, distinguishing three dimensions: distance in stage of education, formality of the educational setting and size of the group taught. Theories are categorized in two dimensions: theories that explain benefits of peer teaching from a cognitive versus a social-psychological perspective, and theories that explain benefits for peer learners versus peer teachers. Conclusion: Both dimensional frameworks help to clarify why and in what conditions peer teaching may help students to learn.