Peer observation can be applied to assess teachers’ performance. Despite an ever-growing corpus of literature on peer observation of teaching in education, very little research has been undertaken in tertiary level contexts where English is a second language (ESL), and no such study has been undertaken in a Pakistani context. Peer observation is commonly used to assess teachers in Pakistan. It is regarded as the first step towards quality assurance to provide evidence for reappointment or promotion decisions. Such summative peer observation done for evaluative purposes is generally seen by observed teachers as a threat to their professional autonomy, because it is often considered as a fault-finding tool. However, formative peer observation has the potential to play a pivotal role in teachers’ professional learning and growth. It can be an effective means of assessing teachers by identifying both areas of weakness and strength, thereby promoting teacher development. This qualitative case study was conducted from August 2016 to April 2017 in the context of a renowned private university in Pakistan. It followed an interpretive approach, wherein each individual was believed to have a unique perception and interpretation of the praxis of assessment by means of peer observation of teachers. The study focused on the cognition and practices of a group of six Pakistani ESL lecturers, the observer of their classes, and a member of the Quality Assurance Committee in the context. Data were collected from the lecturer participants through a combination of questionnaires, initial focus group discussions, auditing of post-observation meetings, stimulating the recall of participants of these sessions, individual interviews, and written narrative frames. All data were subjected to a process of grounded analysis. The application of this inductive and multi-method approach to the six lecturers, alongside the interviews with the management personnel, and the collection of pertinent documents have provided a detailed picture of peer observation. This was achieved by first identifying the institutional perspective, and then by presenting the practitioners’ cognitive development, discussed in light of Kolb’s (1984, 2015) Experiential Learning Theory. In brief, findings revealed substantial diversity in views across the sources obtained within the institution. This study also provided a systematic structure for reflective practice to the lecturers and their repeated engagement in the research project facilitated their learning and enhanced their cognition, collectively and generally, and then individually and more specifically. This process enabled them to articulate their beliefs, which led to build on their understandings about peer observation more positively at the university context. Therefore, the idea and significance of reflective practice in peer observation to ensure that professional learning takes place are endorsed in the findings of this research. This research potentially contributes to the current corpus of literature theoretically, methodologically, and contextually. The findings of this study also offer practical implications for researchers, institutional leaders, and practitioners of peer observation.