Purpose: Young adults with disabilities often report feeling alone in their experience of disability. Group-based rehabilitation programs provide opportunities to participate in learning processes and share experiences of living with a disability. The aim of this study was to explore and interpret social interactions and personal processes of engagement and development of young adults with disabilities during a rehabilitation program. Methods: Fifty-four young adults attending a group-based rehabilitation program at Beitostølen Healthsports Center (BHC) participated in the study. A grounded theory methodology employing ethnographic data enabled an in-depth exploration of the social processes occurring during the rehabilitation stay. Results: The social environment was important to personal processes during the stay. Fundamental to the social processes was a culture defined by opportunities, competence, and involvement of the young adults that promoted feelings of safety and the freedom to challenge themselves. Being with peers with disabilities enabled a sense of community underpinned by a shared understanding. Peers fostered motivation to actively engage in the participation processes, built courage and promoted self-reflection. Conclusion: This article contributes to the understanding of the dynamic interactions between social contextual structures and interrelations, and personal processes of engagement and developmental experiences during a group-based rehabilitation program.IMPLICATIONs FOR REHABILITATION Rehabilitation in context of a peer-group was highly valued and made a unique contribution to the rehabilitation experience. Being in a group with peers sharing the experience of disability resulted in a safe learning environment, improving participants’ motivation, encouraging them to engage in challenging activities and social interactions. The informal interactions and shared experience of living with a disability promoted self-reflection and improved self-understanding. Being with peers sharing the experience of disability provided opportunities for role modelling and mentoring, inspiring participants as to what might be possible.