Purpose – The current study seeks to examine the impact of peer firms (PF) on dividend smoothing (DS). Additionally, the study investigates how the information environment (IE) and market competition (COMP) moderate the relationship between PF and DS. Design/methodology/approach – This study uses a quantitative research method to investigate the impact of PF on DS and then the moderating role of IE and COMP in 62 Egyptian firms from 2018 to 2021, using the Generalized Method of Moments (GMM) in Stata/IC15 to test the hypotheses. Findings – The findings reveal a significant positive impact of PF on the dividend payout ratio and DS behavior. The moderating role of IE opaqueness weakens the positive impact of PF on dividend payout ratios and increases DS behavior. Moreover, the moderating role of COMP enhances the positive impact of PF on dividend payout ratios and increases DS behavior.  Originality/value – The current study extends the literature on PF and DS, particularly in Egypt. This study contributes to improving the understanding of the role of IE and COMP. Furthermore, the study increases firms' awareness concerning DS behavior which can be used as a strategic response to PF' performance. Finally, the study increases investors' awareness concerning predicting firms' dividends more precisely and choosing appropriate shares for their portfolios by analyzing the behavior of PF.