The theory of peer effect posits that students who find themselves in the company of high or low performing peers tend to exhibit better academic performance than what is solely attributable to their own individual characteristics. In this study, we investigate peer effects within literacy achievement among Trinidadian and Tobagonian youth, using a nationally representative sample of 15-year-old students. Findings indicate the presence of a strong literacy-based peer effect in mathematics, reading, and science even after controlling for individual demographic differences. Peer effect alone explained between 30% and 67% of the total variation in literacy. Implications are discussed.