This paper examines the introduction of peer review of teaching in a pre-1992 university in England. The paper first considers the theoretical dimensions. Peer review of teaching is generally seen as a quality enhancement rather than a quality assurance instrument and a powerful means of encouraging the continuing professional development of individual lecturers. However, the paper identifies that where peer review of teaching is not seen in these terms, but rather as just one of many impositions by external agencies, universities face the major challenge of changing organisational culture and influencing the assumptions, beliefs, values and behaviours of academic staff. The second part of the paper discusses a case study of the implementation and impact of peer review of teaching in a large and very diverse university. This study highlights the theoretical concepts discussed and helps to conceptualise the problems associated with formative peer review of teaching in higher education.