This thesis examines the role of peers when students’ educational decisions are formed. The thesis uses rich administrative data from Sweden, which provides opportunities to follow students over different transitions in their educational career and assess the role of peers in different educational situations. The thesis consists of one introductory chapter and four empirical studies. Study I examines how peers influence each other’s applications to upper secondary education through two different influence functions, where students both conform to their peers’ ambitious decisions and simultaneously can be discouraged from ambitious decisions by high-achieving peers. Study II builds on the findings from Study I and examines if students who conform to their peers’ educational ambitions and enroll in ambitious and demanding educations are more prone to leave such educations since their applications potentially were too myopic when influenced by their peers. Study III examines how students’ decisions to apply to gender typical and gender atypical upper secondary educations were affected by their peers. The study additionally examines if students enrolled in atypical educations are more likely to leave the education and if such decisions are mediated by the peer composition in their upper secondary education. Study IV examines how an admission reform to upper secondary education, which increased the sorting of students on achievements, affected application behavior to different tertiary education.