Background Gossip is a ubiquitous sociocultural phenomenon serving many functions in human interactions, including in workplace and academic settings. Gossip can have profound positive and negative impacts; however, its impact on medical residents and their learning environment is unknown. Objective To understand the function and impact of workplace gossip-from and about colleagues and supervisors-on medical residents' experiences in their learning environment. Methods This exploratory study used principles of constructivist grounded theory. Data were collected from residents in the obstetrics and gynecology and psychiatry programs at a large academic institution via semistructured interviews in 2021. Seven residents were interviewed. Transcripts were analyzed using inductive coding, and themes were identified. Results Thematic analysis revealed perceived positive and negative impacts of gossip. Perceived positive impacts included affirmation and roadmapping. Perceived negative impacts included anxiety/fear and the role of gossip in reinforcing the educational hierarchy. Other themes, which are perceived to have both positive and negative impacts, included the role of gossip in learning and in group status. The identity of the gossiper, audience, and subject of gossip also impacted its effects. Gossip between residents about faculty members was perceived as roadmapping, or an affirming role, whereas gossip involving faculty members created anxiety and reinforced negative aspects of the hierarchy. Conclusions Workplace gossip serves both positive and negative roles within the medical learning environment. It can function as informal debriefing and can also threaten psychological safety. Its impact on residents is affected by the identities of the gossiper, subject, and audience.