Peer review serves as an important adjunct to other hospital quality and safety programs. Despite its importance, the available literature contains virtually no guidance regarding the structure and function of effective peer review committees. This Clinical Perspective provides a summary of the purposes, structure, and functioning of effective peer review committees. We also discuss important legal considerations that are a necessary component of such processes. This discussion includes useful templates for case selection and review. Proper committee structure, membership, work flow, and leadership as well as close cooperation with the hospital medical executive committee and legal representatives are essential to any effective peer review process. A thoughtful, fair, systematic, and organized approach to creating a peer review process will lead to confidence in the committee by providers, hospital leadership, and patients. If properly constructed, such committees may also assist in monitoring and enforcing compliance with departmental protocols, thus reducing harm and promoting high-quality practice.