Adolescents take more risks in the presence of their peers, but the mechanism through which peer presence affects risky decision-making is unknown. We propose that the presence of peers increases the salience of the immediate rewards of a risky choice. The current study examined the effect of peer presence on reward sensitivity in a sample of 100 late adolescents ages 18 through 20 (M=18.5) using a delay discounting task, which assesses an individual's preference for immediate versus delayed rewards. Participants were randomly assigned to complete the task alone or with 2 same-age, same-sex peers observing. Consistent with our prediction, adolescents demonstrated a greater preference for immediate rewards when with their peers than when alone. Heightened risk taking by adolescents in the company of their friends may be due in part to the effect that being with one's peers has on reward sensitivity.