Peer-assisted learning (PAL) has been reported to have educational benefits in cross-year, small-group teaching in other contexts. Accordingly, we explored whether senior medical students are effective tutors for their junior peers in clinical skills education, and how the participants in the learning triad (tutors, learners and simulated patients [SPs]) perceive the learning environment created in PAL. Year 2 students were randomly allocated to one of two groups for skills training. Group 1 (n = 64) were tutored by volunteer Year 6 students, and Group 2 (n = 67) by paid doctors. The results of both groups in a clinical skills examination were compared using an independent samples t-test. Qualitative data, obtained from Year 2 students (n = 125) by written questionnaire and Year 6 students (n = 11) and SPs (n = 3) by focus group interviews, were analysed for themes. Students receiving PAL did at least as well in the clinical skills examination as students with qualified tutors (difference in mean total score: 0.7 marks out of 112; 95% confidence interval - 3.8 to 2.4). The PAL environment was perceived as 'comfortable' and fostered the development of confidence in all participants. Peer tutors created a more active learning environment than doctor tutors for both learners and SPs and reported personal benefits from teaching. With appropriate support, volunteer Year 6 student tutors are as effective as graduate doctors for small-group structured tutorials in clinical skills. Educational relationships were forged between all participants in the learning triad.