This paper outlines twelve tips for undertaking peer observation of teaching in medical education, using the peer review model and the experiences of the authors. An accurate understanding of teaching effectiveness is required by individuals, medical schools, and universities to evaluate the learning environment and to substantiate academic and institutional performance. Peer Observation of Teaching is one tool that provides rich, qualitative evidence for teachers, quite different from closed-ended student evaluations. When Peer Observation of Teaching is incorporated into university practice and culture, and is conducted in a mutually respectful and supportive way, it has the potential to facilitate reflective change and growth for teachers.