It can be shown that the long–term periodic variations in the U band, distinctly observed in AG peg by UBV photometry (Belyakina 1970) from the early 1960’s with amplitude increasing, over since, have in fact two principal reasons for their existence. One of these is transparency of the envelope to the Lc-emission of the hot component in AG Peg arisen in the 1950’s and increasing since then. The second one is connected with the changes of the transparency of the compact part of the gas envelope located close to the hot component when in moves along its orbit (Yudin 1987). It is interesting to note that for the orbital solution with non-zero eccentricity (Hunchings et al. 1975) the transparency minimum and consequently the flux emission maximum for the gas envelope in AG Peg are observed in the moment when the hot component is close to its apoastron. The amplitude of the periodic variations in V increases due to the existence in AG Peg of the effect of noticeable heating of the cool component’s hemisphere facing its hot companion. Using the TiO bands in the red the cool component in AG Peg is classified as slightly earlier than M2 from illuminated side and slightly later than M3 from the opposite one (Ipatov and Yudin 1986).