Despite continuing interest in teacher reflection and an extensive body of research on peer assessment, the interaction between these areas has not been sufficiently investigated. This study on reflection and peer feedback is part of an ongoing action research addressing the design and pedagogical model of a theoretically oriented teacher training course. The course comprised face-to-face lessons followed by written reflections of the student-teachers concerning their learning experiences. These reflections were presented for peer feedback - thereby initiating a community of reflecting peers ("co-reflection")--and were additionally subjected to instructor feedback under two conditions (full vs. diluted). Student-teachers' perception of their professional development that resulted from these co-reflecting communities were quantitatively evaluated (using a self-reported questionnaire) over a three-year period. An enhanced positive effect over the three-year period was found--regardless of the instructor feedback condition--as well as significant differences between parallel groups (higher for science vs. mathematics student-teachers). These are described in the first part of the paper, followed by an in-depth case study analysis in the second section. The case studies reported inclusive analysis of the students' written reflections and feedback. It provides an insight into the processes of co-reflection, identifies changes over time in the quality of reflections and feedback, as well as in the personal, professional and social development of the student-teachers, attempting to identify the mechanisms leading to these changes. Examples are cited to illustrate the ways in which the students developed and what activated their motivation for development. The case studies reveal two developmental models, one of external orientation and the other internal. These are characterized by a "willing receiver" and "willing donor", respectively. The importance of a "maturity interval", when the student is "ripe" for developmental change, was also demonstrated. Offering an appropriate trigger at this mature point may stimulate crucial development. Teacher development is further interpreted in terms of interpersonal variables. The current paper may encourage teacher educators and student-teachers themselves to incorporate co-reflecting in their course planning and community planning. Ways may be designed to train student-teachers to offer and use feedback effectively. For feedback to be valuable, it should be reinforcing, challenging, thorough and sincere, radiate faith, and be of a friendly nature - it should be non-insulting and non-judgemental. They may be used for in-text as well as summary remarks. (Contains 3 tables and 1 scheme.)