Peer education is popular both with governments and with young people. The purpose of this quasi-experimental study was to evaluate the effectiveness of a government-led peer education program on the self-reported sexual health behavior and related psychosocial outcomes of adolescent students in public high schools in the Western Cape of South Africa. Grade 10 students (n = 3934), at 30 public high schools (15 intervention, 15 comparison) were recruited to the study. In the intervention schools, peer educators were recruited and trained to provide information and support to their fellow students. Sexual health behaviors and related psychosocial outcomes of students were measured at baseline and at follow up 18 months later. Comparisons were made between those in the intervention and comparison group schools. We were unable to detect a significant difference in the age of sexual debut, use of condoms at last sex, goal orientation, decision-making or future orientation for students in the intervention group as compared to students in the comparison group. The findings suggest that the peer education program was not effective in reducing the age of sexual debut or condom use. Issues around the implementation of the program suggested that this was sub-optimal. Governments who advocate widespread use of peer education as an approach need to recognise barriers to implementation and ensure ongoing monitoring and evaluation of effectiveness and cost effectiveness.