Developing effective methods for improving student learning in higher education is a priority. Recent findings have shown that feedback on student work can effectively facilitate learning if students are engaged as active participants in the feedback cycle; where they seek, generate and use feedback in the form of dialogue. This novel study investigates the use of peer dialogue assessment as an assessment for learning tool used in an existing undergraduate physical education course. Our findings demonstrate that when thirty six undergraduate physical education students were provided with instruction and practice using peer dialogue assessment after consecutive teaching performances, they exhibit significant improvements in perceived teaching confidence and competence, and teaching self-efficacy. Process evaluation results implying that embedding peer dialogue assessment in higher education courses may be a feasible approach for facilitating learning, and that students were satisfied with using peer dialogue as a feedback method for improving teaching practices.