Social learning is fundamental to human development, helping individuals adapt to new conditions and cooperate in groups. During the formative years of adolescence, the social environment shapes people’s socio-cognitive skills needed in adulthood. Yet, peer influence during this pivotal developmental stage is generally associated with risky and unruly conduct, with eminent negative long-term effects on adolescents’ educational, economic and health outcomes. Here we show, in contrast to this traditional view, that the impact of peers on adolescents’ behaviour can also be markedly positive. Exposure to disobedient peers provoked rule breaking, and selfish peers reduced prosocial behaviour, particularly in early adolescence. However, compliant peers also promoted rule-following and fair peers increased prosociality. A belief formation task further revealed that early adolescents tend to assimilate social information, while older adolescents prioritise personal views. Our results suggest that these developmental patterns reflect a decline in an underlying domain-general factor of social sensitivity during adolescence, and highlight early adolescence as a key window for peer-based interventions to improve developmental trajectories.