With an increasing number of young children participating in preschool education, this study determined whether peer effects are present in this earliest sector of schooling. Specifically, this work examined whether peer effects were influential to preschoolers’ growth in language skills over an academic year and whether peer effects manifest differently based on children’s status in reference to their peers. Peer effects were assessed for 338 children in 49 classrooms. A significant interaction between the language skills of children’s classmates and children’s fall language skills indicated that peer effects were strongest for children with low language skills who were in classrooms that served children with relatively low skill levels, on average. Findings further showed that reference status, or children’s relative standing to their peers, has the greater consequence for children with very low language skills in relation to their peers.