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LGBTQ identities begin developing in adolescence and LGBTQ students face significant educational disparities. This paper uses unique panel data from one of the largest school districts in the US from 2017-2020 to study (1) how LGBTQ identities and these educational disparities evolve in adolescence and (2) how having LGBTQ peers affects identity development and educational outcomes using within-school, cross-cohort variation in the share of 9th-grade peers who identified as LGBTQ in 8th grade. First, cross-sectional statistics understate the share of students likely affected by policies targeting LGBTQ students: while 5-9 percent of students identify as LGBTQ in a given year, 14 percent of students ever do so and at least 20 percent of students are ever uncertain of their identity. Students who eventually, but have not yet, “come out” have substantially higher bullying risk even five years earlier. Second, having more LGBTQ peers has striking effects for LGBTQ students: it weakly increases the likelihood of continuing to identify as LGBTQ, substantially reduces bullying and improves feelings of belonging and perceptions of LGBTQ acceptance, and reduces the likelihood of leaving the district. Increasing the share LGBTQ by 10pp reduces disparities in bullying between LGBTQ students and their cisgender and heterosexual peers by 50 percent and eliminates other gaps.