The use of peer leaders as a component of first-year seminars (FYSs) is designed to assist in the academic success of first-year college students. Although the positive impact of peer leaders is well established, the understanding regarding the mechanisms through which peer leaders influence students' academic achievement and persistence is still lacking. This short-term longitudinal study tested a mediational model of the relationship among FYS peer leader types (undergraduate peer leaders, graduate peer leaders, no peer leaders), student involvement, end-of-first-year GPA, and second-year persistence with a sample size of 2,407 first-year FYS students. Results from structural equation modeling with the adjustment of sample nesting on the class level showed that students' study hours and end-of-first-year GPAs mediated the relationship between graduate peer leaders and students' second-year persistence. The indirect effects did not differ significantly between students with undergraduate peer leaders and students without peer leaders. Implications for FYS programs are discussed.