Momentum is building across mental health research and practice toward collaborative, equity-driven approaches, yet institutional cultures often remain rooted in hierarchy and individual achievement. Co-production has emerged as a framework for redistributing power, fostering reciprocity, and embedding lived experience into research and system design. However, it is typically framed as something that occurs externally with communities, while the internal research dynamics within institutions go unexamined. In this commentary, we argue that peer-led co-production is a vital but under-recognized strategy for transforming mental health systems from within. Drawing on the experience of the Network for Early Career X Trainee Researchers in Youth Mental Health (NExT) in Canada, we examine how early career researchers (ECRs) are modelling alternative ways of working through relational leadership, shared accountability, and collaborative infrastructures. We identify structural barriers that constrain this work, including siloed training pathways, narrow professional evaluation metrics, rigid role definitions, and funding mechanisms that undervalue relational practices. Building on these insights, we outline a roadmap for embedding peer-led co-production within institutions, calling for four shifts: sustained investment in relational infrastructure; training that embeds collaborative competencies; evaluation systems that reward both outcomes and processes; and leadership models that support shared governance. Peer-led networks demonstrate that these shifts are not abstract ideals but viable practices already in motion. Realizing their potential requires institutional commitment to reconfiguring funding, training, evaluation, and leadership so that co-production becomes foundational of mental health research and system change.