Much literature on peer influence has relied on central tendency– based approaches to examine the role of peer groups. This article develops a distributional framework that (1) differentiates between the influence of depressive peers and that of a majority group of non-depressive peers; and (2) considers the multilayered nature of peer environments. The authors investigate which segments of the distribution of peer depressive symptoms drive peer effects on adolescent depression across different layers of peer groups. Results from the Add Health data show that, for institutionally imposed peer groups, exposure to depressive peers significantly increases adolescents’ depressive symptoms. For self-selected peer groups, the central tendency of peer depression largely captures its impact on adolescent depression. High parent-child attachment buffers the deleterious consequence of exposure to depressive grademates. The implications of these findings are discussed for research and policy regarding peer effects on adolescent well-being.