Two or three scholars with expertise in the topic of the manuscript will be asked to provide a constructively critical review and make a recommendation about publication. The reviews will be anonymous, but many presses will allow you to suggest well-qualified readers and to list anyone you would like them to avoid because of personal or professional conflicts of interest. Peer review for books is most often single anonymous (unlike peer-review journals that are usually double anonymous), so the readers will know who you are but you will not know who they are unless they decide they want to reveal their identity.
Once the reviews are returned to the acquisitions editor, the editor will provide full copies of the reviews (with any information that might identify the reader removed) to the author, often with an additional memo summarizing the reviews, highlighting important points, and offering their own opinions and thoughts on the proposal or manuscript. It is important to note that peer review can occur at different stages of the book proposal process. Peer review can, and often does, occur at the proposal stage and before a complete manuscript is available. In these cases, peer review can play an important role in developmental editing and can also help the press to decide whether they want to place a project under contract prior to completion of the final manuscript. If a project is placed under contract at the proposal stage, then it will likely undergo another round of peer review once the full manuscript is completed.