Peer support is increasingly provided as a component of mental health care, where people in recovery from mental health problems use their lived experiences to provide support to those experiencing similar difficulties. In the present study, we explored the evolution of peer support workers’ (PSW) occupational identities. A qualitative study was undertaken alongside a pilot randomized, controlled trial of peer support for service users discharged from a mental hospital in London, UK. Two focus groups were conducted with eight PSW. Semistructured interviews were conducted with 13 service users receiving peer support and on two occasions with a peer support coordinator. The data were analysed using theoretical thematic analysis, focussing on occupational identity formation. We discuss how the occupational identity of PSW evolved through the interplay between their lived experience, their training, and their engagement in the practice environment in such a way as to construct a liminal identity, with positive and negative outcomes. While the difficulties associated with the liminality of PSW could be eased through the formalization and professionalization of the PSW role, there are concerns that this could lead to an undermining of the value of PSW in providing a service by peers for peers that is separate from formal mental health care and relationships. Skilled support is essential in helping PSW negotiate the potential stressors and difficulties of a liminal PSW identity.