This laboratory-based research investigated how 40 university EFL learners responded to their peers' linguistic errors and made their moment-to-moment decisions of whether or not to provide corrective feedback (CF) to their peers' errors in task-based peer interaction. Data from the transcripts of videotaped pair interaction and audio-taped stimulated recall interviews were utilized and analysed to report the findings. Results showed that learners did not provide CF to their partners frequently and of the three CF strategies, they favoured recast over prompts and explicit correction. Furthermore, more morphosyntactic errors than lexical and phonological errors were provided CF. More importantly, results revealed that learners' CF decision-making was mediated by six categories of factors: provider-related factors (e.g. providers' lack of knowledge), receiver-related factors (e.g. receivers' showing signs of seeking help), task-related factors (e.g. the time of story happening), error-related factors (e.g. salience of errors), and interpersonal factors (e.g. peer relationship). Implications are discussed especially regarding the important role of teachers in raising learners' language awareness in peer interaction.