The widespread shift towards recovery-oriented mental healthcare has led to the extensive growth of peer-delivered services. Peer support workers draw on lived experience of mental health challenges and service use to provide non-clinical support services. As peer support services have grown, they have also formalized. This mixed-methods study of peer support work in Pennsylvania (USA) explores how peer support has been institutionalized, and identifies the intended impacts and unintended consequences associated with that process. In Pennsylvania, the inclusion of peer support services as a Medicaid reimbursable service, in addition to county level mandates regarding peer support service availability, have served to institutionalize the field. Data include 49 semi-structured interviews conducted with peer support workers (n = 35) and stakeholders (n = 14) in 2016. Qualitative analyses reveal changes to the scope and nature of peer support work, the peer workforce, peer client relationships, and to stigma in the workplace. Despite these changes, peer workers frequently remain underpaid and unable to advance professionally. The institutionalization of peer support serves as a barrier to worker entry and retention and highlights tensions between the consumer-driven origin of the recovery field and the current mental healthcare system. The institutionalization of roles defined by experiential expertise, such as peer support, has the potential to reduce the very centrality of experiential expertise, reproduce social inequalities, and paradoxically impact stigma. Copyright © 2020 Elsevier Ltd. All rights reserved.