Various parties have asserted that the novel implies homoeroticism between Gene and Finny, including those who endorse a queer reading of the novel, and those who condemn homosexuality as immoral. For example, the book was challenged in the Vernon-Verona-Sherill, NY School District (1980) as a "filthy, trashy sex novel" despite describing no sexual activity (and having no female characters). These assertions are based on the apparent strong feelings between the two teenage boys, especially Gene's conflicting feelings of love and hate towards his idolized best friend and roommate, and his subsequent action towards him. The novel's setting at a private boys' boarding school – which have often been perceived (accurately or not) as nurseries of homosexual experimentation – can contribute to this perception.
Though frequently taught in U.S. high schools, curriculum related to A Separate Peace typically ignores a possible homoerotic reading in favor of engaging with the book as a historical novel or coming-of-age story. Knowles denied any such intentions, stating in a 1987 newspaper interview:
"Freud said any strong relationship between two men contains a homoerotic element...If so in this case, both characters are totally unaware of it. It would have changed everything, it wouldn’t have been the same story. In that time and place, my characters would have behaved totally differently."