BACKGROUND: While Peer Assisted Learning (PAL) has long occurred informally in medical education, in the past ten years, there has been increasing international interest in formally organised PAL, with many benefits for both the students and institutions. We conducted a systematic review of the literature to establish why and how PAL has been implemented, focussing on the recruitment and training process for peer tutors, the benefits for peer tutors, and the competency of peer tutors. METHOD: A literature search was conducted in three electronic databases. Selection of titles and abstracts were made based on pre-determined eligibility criteria. We utilized the 'AMEE Peer assisted learning: a planning and implementation framework: AMEE Guide no. 30' to assist us in establishing the review aims in a systematic review of the literature between 2002 and 2012. Six key questions were developed and used in our analysis of particular aspects of PAL programs within medical degree programs. RESULTS: We found nineteen articles that satisfied our inclusion criteria. The PAL activities fell into three broad categories of teacher training, peer teaching and peer assessment. Variability was found in the reporting of tutor recruitment and training processes, tutor outcomes, and tutor competencies. CONCLUSION: Results from this review suggest that there are many perceived learning benefits for student tutors. However, there were mixed results regarding the accuracy of peer assessment and feedback, and no substantial evidence to conclude that participation as a peer tutor improves one's own examination performance. Further research into PAL in medicine is required if we are to better understand the relative impact and benefits for student tutors.