Children with hearing loss often attend inclusive preschool classrooms aimed at improving their spoken language skills. Although preschool classrooms are fertile environments for vocal interaction with peers, little is known about the dyadic processes that influence children's speech to one another and foster their language abilities and how these processes may vary in children with hearing loss. We used new objective measurement approaches to identify and quantify children's vocalizations during social contact, as determined by children's proximity and mutual orientation. The contributions of peer vocalizations to children's future vocalizations and language abilities were examined in oral language inclusion classrooms containing children with hearing loss who use hearing aids or cochlear implants and their typically hearing peers. Across over 600 hours of recorded vocal interactions of 29 2.5–3.5 year olds (16 girls) in 3 cohorts of children in a classroom, we found that vocalizations from each peer on a given observation predicted a child's vocalizations to that same peer on the subsequent observation. Children who produced more vocalizations to their peers had higher receptive and expressive language abilities, as measured by a standardized end-of-year language assessment. In fact, vocalizations from peers had an indirect association with end-of-year language abilities as mediated by children's vocalizations to peers. These findings did not vary as a function of hearing status. Overall, then, the results demonstrate the importance of dyadic peer vocal interactions for children's language use and abilities. (author abstract)