Peanut allergy is known to cause severe anaphylactic reactions. Compared with other food allergies it tends to be more persistent and also its prevalence seems to be rising. Currently there is no proven treatment other than strict avoidance. We are attempting to decrease the risk of anaphylaxis on accidental ingestion by desensitizing subjects to peanut using peanut oral mucosal immunotherapy (OIT). We are also studying the effect of peanut OIT on the peanut specific immune response to determine if tolerance to peanut protein will develop. Children ages 1 to 18 with peanut allergy will be randomized to peanut OIT or placebo. Subjects will undergo a modified rush immunotherapy on the first day and then increase the doses at least every two weeks up to a maintenance dose of 4 grams (equivalent to about 13 peanuts). Doses will be taken daily at home except for dose increases which will be done on the research unit. Subjects will undergo a double-blind, placebo-controlled food challenge (DBPCFC) after 12 months and then be unblinded. Placebo subjects will cross over to open-label peanut OIT and undergo an identical buildup schedule up to 12 months. All subjects will then complete at least 36 months of peanut OIT therapy after which once skin prick (<5 mm) and IgE (<15 kU/L) criteria are met, they will then complete the end of study DBPCFC. Dosing will continue up to a maximum of 60 months after which even if criteria are not met, the subject will undergo the end of study DBPCFC. Outcome variables of interest include response to DBPCFC, skin prick testing, peanut specific IgE, and adverse events. These results will be compared between the start and end of peanut OIT using appropriate statistical analysis.