Background: Understanding peer effect is potentially important for finding ways to combat the obesity epidemic. Nevertheless, it is not clear whether a peer effect exists because of the composition of the peer group, because the group members have similar, unobserved individual characteristics, or because of an endogenous effect. Methods: This issue is addressed here by using a unique longitudinal data set of 573 schoolchildren attending state schools in the Municipality of Aalborg, Denmark, during 2008-2010. To identify the spillover effect of a targeted intervention on peers, we use a difference-in-differences approach. Results: A targeted health intervention reduced body mass index (BMI) among overweight, inactive individuals and, more interestingly, that BMI among the nontreated peers was reduced by 1.04%. Conclusions: The analysis suggests that individually targeted health intervention has a health benefit beyond the treated individual, which needs to be included when evaluating targeted policies aiming to combat childhood overweight and inactivity.