We studied the origin of peak effect in the magnetic field dependence of Jc in NdBa2Cu3O7- σ single crystals. The single crystals were grown by the slow cooling method under various partial O2 pressures(PO2) (0.04∼1%) in Ar atmosphere. We found that the peak effect depends on PO2 and it disappears for the crystals grown under low PO2∼0.04%. This result demonstrates the important role of Nd/Ba substitution for the peak effect because it is known that the Nd/Ba substitution decreases with lowering PO2. We also investigated the role of oxygen vacancies in the peak effect for the crystals with different amount of Nd/Ba substitution. We found that the main cause of peak effect in fully oxygenated crystals is due to local low Tc regions caused by the Nd/Ba substitution rather than those by the oxygen vacancies.