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This study investigated how peer-mediated Dynamic Assessment (DA) unfolded in translation revision competence (TRC) of students of Master's degree of Translation and Interpreting (MTI) in China. Thirty subjects first completed three revision tasks and were then rated as high- or low-level performers according to their average scores across the first two tasks. Students were subsequently assigned to either the role of learner or peer mediator. Peer mediators received training in a graduated prompts approach to DA to learn how to provide their peers with mediation. Peer mediation sessions were conducted with the mediators and the learners paired at random and directed to jointly review their third revision. After that, all participants re-revised their last texts with their justifications and were interviewed about their attitudes towards peer interaction and their progress in TRC. Diagnosis of TRC comprised scores of the first two revisions as well as the third revision following peer mediation, with this latter score indicating responsiveness to mediation and interpreted as the Zone of Proximal Development. The findings indicated that peer mediation may help improve both mediators' and learners' TRC, yet other potential factors at work should not be ignored. The peer engagement process allowed participants to improve their TRC in terms of justification and interpersonal skills. This research explored the application of DA in translation training and provided a process-oriented evaluation for translation studies.