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Currently, the mechanism by which dyadic peer support programs may facilitate positive psychological adjustment for cancer patients is unclear. This study utilized social comparison theory to examine the effects of peer support on the psychological adjustment of women with breast cancer.A cross-sectional survey of 251 recently diagnosed breast cancer patients (52% response), who had received a dyadic peer support intervention, was undertaken assessing anxiety, depression, perceived threat, and upward comparison.Perceived cancer threat significantly moderated the relationship between positive upward comparison and depression levels (p = 0.017). Women who engaged in upward comparisons and who perceived their diagnosis to be more threatening had lower depression levels than women who were less threatened.Peer support services that provide support from cancer survivors may be especially beneficial for people who appraise their cancer diagnosis as more threatening. The application of theoretical models to future evaluation designs will further increase understanding of the psychological mechanisms involved in the effects of peer support and inform program development. Copyright © 2010 John Wiley & Sons, Ltd.