Relationships between peers are often considered central to the therapeutic process, yet there is relatively little empirical research either on the nature of peer-to-peer relationships within residential treatment or on how those relationships generate positive behaviour change or facilitate recovery. In this paper, we explore relationships between peers in residential addiction treatment, drawing upon the concept of social capital to frame our analyses. Our study was undertaken during 2015 and 2016 in two English residential treatment services using the same therapeutic community-informed model of treatment. We conducted 22 in-depth interviews with 13 current and 9 former service residents. All interviews were audio-recorded, transcribed verbatim, coded in MAXQDA, and analysed using Iterative Categorisation. Residents reported difficult relationship histories and limited social networks on entry into treatment. Once in treatment, few residents described bonding with their peers on the basis of shared experiences and lifestyles. Instead, interpersonal differences polarised residents in ways that undermined their social capital further. Some senior peers who had been in residential treatment longer acted as positive role models, but many modelled negative behaviours that undermined others' commitment to treatment. Relationships between peers could generate feelings of comfort and connectedness, and friendships developed when residents found things in common with each other. However, residents more often reported isolation, loneliness, wariness, bullying, manipulation, intimidation, social distancing, tensions and conflict. Overall, relationships between peers within residential treatment seemed to generate some positive but more negative social capital; undermining the notion of the community as a method of positive behaviour change. With the caveat that our data have limitations and further research is needed, we suggest that residential treatment providers should more routinely open the "black box" of "community as method" to consider the complex and dynamic nature of the relationships and social capital inside.