This study investigates the effect of homogeneous and heterogeneous peer interaction on the development of Iranian EFL learners’ writing skill. Sixty female students of TEFL participated in the study. The participants were divided into two groups based on their English proficiency test scores. The homogeneous group consisted of 14 participants paired with partners with similar English proficiency test scores, while the heterogeneous group consisted of 16 participants who were paired with partners who had higher test scores. The pairs had interaction and peer collaboration before carrying out three types of writing tasks. The Repeated Measures ANOVA was used to compare the student writers’ pretest writing scores with their three post-test scores. The results showed that both groups, very similarly, had significantly higher post-test scores in all three writing tasks. The findings are explained based on the sociocultural theory and Vygotsky’s notion of the zone of proximal development (ZPD). The study offers several important pedagogical implications and suggestions for further research.