This study examines the influence of exposure to older within-grade peers on sexual behavior among students in urban South Africa. Data are drawn from the Cape Area Panel Study, a longitudinal survey of young people conducted in metropolitan Cape Town from 2002 to 2006. The combination of early sexual debut, high rates of school enrollment into the late teens, and grade repetition create an environment in which young people who progress through school ahead of many in their cohort interact with classmates who may be several years older. We construct a measure of cumulative exposure to classmates who are at least two years older and show that such exposure is statistically significantly associated with early sexual initiation among adolescent girls. This exposure also increases the age difference between these girls and their first sexual partner, and helps explain a significant proportion of the earlier sexual debut of African girls, compared with colored and white girls in Cape Town.