This study emphasises different facets of peer exploitation awareness and experience identified in closed‐type institutions, including a couple of abusive behaviours that have not been previously identified in long‐term residential centres. ‘Emphasises different facets of peer exploitation awareness and experience identified in closed‐type institutions’ A national representative sample of 1391 children (743 boys and 648 girls) seven to 20 years of age living in 44 long‐term residential centres was analysed to identify the prevalence of awareness and experience of peer exploitation. Multilevel logistic regression models were used to identify the predictors of peer exploitation experience. In total, 40.1 per cent of children reported that they were aware of peer exploitation, and 28.5 per cent that they were victims of such exploitation. Additionally, it was shown that (a) children who reported past abuse by a staff member were more likely to be victims of exploitation than those who did not; and (b) an increased number of children in a dorm room predicted a decrease in the odds of peer exploitation experience. This study provides a picture of the developmental environment for children in Romanian orphanages in the late 1990s, prior to subsequent child protection reforms, and underlines the prevalence of exploitation and the risk factors for peer exploitation in closed institutional systems. Copyright © 2017 John Wiley & Sons, Ltd. Key Practitioner Messages Four in ten (40%) institutionalised children reported that they were aware of at least one form of peer exploitation, and nearly three in ten (28.5%) reported experiencing at least some of these types of exploitation practices by their older peers. This study highlights the importance of understanding the complex milieu that comprised the daily lives of institutionalised children in Romania, including an environment that consisted of physical abuse by institution staff and awareness and experiences of exploitation.