Peer feedback carries a number of potential benefits to students, yet how they learn in the process remains under-researched. Building on ideas of feedback as dialogue, this study aims to unpack the respective perceptions of the provider and the receiver of peer feedback in relation to the benefits and challenges of dialogue about academic writing. Data were collected through classroom observations, interviews and journals at a university in southern China. Two key inter-related benefits emerge from the qualitative analysis of students' perceptions of verbal interaction about written peer feedback. The provider of written comments obtains feedback on their feedback and the receiver has the opportunity to clarify or negotiate meaning with the feedback provider. Contextual challenges include students wanting more guidance about peer feedback and desiring more teacher input to the process. The study adds to the knowledge about the significance of peer dialogue in mutual clarification and negotiation between the provider and the recipient while emphasising ongoing teacher guidance in the process.