The beneficial impacts of peer assessment to improve students' writing have been frequently reported. While students' engagement in the peer assessment process has been highlighted as a critical factor to enhance learning, few studies reported how to engage students. Although students' interaction has been advocated to let students participate in learning, it was found that previous studies of peer assessment only provided very limited opportunities for students to directly interact with each other. In this case study, 153 pre-service teachers were engaged in a group-based online reciprocal peer assessment learning activity to improve their academic writing skills. A core component of dialogic interaction was purposively implemented to foster engagement in the peer assessment process. Results suggest that while the students considered the process quite complicated and they needed more peer assessment training, they were seriously engaged in the process. The quality of students' writing was also found to have improved. The students appreciated the dialogic interactive feature of peer assessment to enhance their learning and they were satisfied with the instructional methods. This study highlights the importance of using dialogic interaction to improve students' engagement.