We present ground-based photometry of the low-temperature contact binary BB Peg. We collected all the times of mid-eclipse available in the literature and combined them with those obtained in this study. Analyses of the data indicate a period increase of (3.0 +/- 0.1) x 10(-8) days yr 1. This period increase of BB Peg can be interpreted in terms of the mass transfer 2.4 x 10(-8) Mo yr(-1) from the less massive to the more massive component. The physical parameters have been determined as M-c, = 1.42 Mo, My, = 0.53 Mo, R-c, = 1.29 Ro, Rh = 0.83 R-circle dot, L-c, = 1.86 L-c, and L-h = 0.94 L-circle dot through simultaneous solutions of light and of the radial velocity curves. The orbital parameters of the third body, which orbits the contact system in an eccentric orbit, were obtained from the period variation analysis. The system is compared to the similar binaries in the Hertzsprung-Russell and mass-radius diagrams.