Peer assessment provides a powerful avenue for students to receive feedback on their learning. Although student perceptions of peer assessment have been studied extensively in higher education, little qualitative research has been undertaken with medical students in problem-based learning (PBL) curricula. A qualitative study of students' attitudes to, and perceptions of, peer assessment was undertaken within the framework of a larger study of metacognition with first-year medical students at the University of Queensland. A highly structured format for provision of feedback was utilised in the study design. Many recommendations from the higher education literature on optimal implementation of peer-assessment procedures were put into practice. Results indicated the existence of six main themes: (1) increased responsibility for others, (2) improved learning, (3) lack of relevancy, (4) challenges, (5) discomfort, and (6) effects on the PBL process. Five of these themes have previously been described in the literature. However, the final theme represents a unique, although not unexpected, finding. Students expressed serious concerns about the negative impact of peer assessment on the cooperative, non-judgmental atmosphere of PBL tutorial groups. The practical implications of these findings are considered.