Peer observation is part of the normal routine and a requirement in many univcrsities in China. It is considered as an important approach to teachers' professional development as well as teacher appraisal and lesson evaluation. But somehow or other, peer observation among language teachers does not seem to serve the purposes in some universities. This paper is to investigate the causes of ineffective peer observation of language teaching, discuss the purposes and techniques of observation and explore feasible ways for increasing effectiveness in language classroom observation in China.