The trap with Peace Lily specifically: it wilts so dramatically and recovers so quickly when thirsty that people learn to read drooping as "needs water" and reach for the watering can every time — including when the real problem is already too much water. Check the soil before you act on the droop alone.
Overwatering and root rot
Peace Lily tolerates a lot, but roots sitting in constantly wet soil lose access to oxygen and begin to break down. A plant with damaged roots can't move water to its leaves properly, which produces both the yellowing and, confusingly, the same drooping the plant normally shows when it's thirsty.
What separates it from underwatering: the soil itself is damp or wet when you check it, and in more advanced cases the pot may give off a sour or swampy smell, with little or no new growth.
Fix: let the soil dry out fully — check the top half of the pot, not just the surface, before watering again. If recovery doesn't follow within a couple of weeks, unpot the plant and check the roots; trim away anything dark and mushy and repot into fresh, well-draining mix.
Underwatering
The more common of the two watering extremes on this plant, since Peace Lily is often left to "tell you" when it's thirsty through drooping — and by the time it droops, some yellowing at the edges or tips can already be underway, especially if this has happened repeatedly.
The tell: the soil is dry, often pulling away from the sides of the pot, and the yellowing tends to come with crispy rather than soft leaf edges.
Fix: water thoroughly until it drains from the bottom — a badly dried-out plant may need a thorough soak rather than just a normal watering. Going forward, water when the top half of the soil has dried rather than waiting for the dramatic droop every time.
Natural aging (not actually a problem)
A healthy, actively growing Peace Lily will occasionally let an old, lowest leaf yellow and die back on its own as it redirects energy to new growth. The tell is that it's isolated — one leaf goes while the rest of the plant looks fine.
Fix: nothing needed. Trim the spent leaf at its base for a tidier look, or leave it.
Water quality
Peace Lily is more sensitive than many houseplants to the chlorine, fluoride, and dissolved minerals in tap water, which can produce a combination of yellowing and browned, crispy leaf tips rather than either symptom alone. This tends to build up gradually across many waterings rather than appearing suddenly.
Fix: switch to filtered water, distilled water, or tap water left out overnight in an open container to let chlorine dissipate before use.
Too little light
Peace Lily is marketed as a low-light plant and genuinely tolerates dim corners, but "tolerates" isn't "thrives" — in very low light it can't photosynthesize enough to support all its foliage, and it responds by yellowing older leaves first while producing paler, more stretched new growth.
Fix: move it to brighter, indirect light. It doesn't need direct sun, but a spot closer to a window makes a visible difference within a few weeks.
Too much direct light
The opposite problem: direct sun, particularly through glass on a south or west-facing window, can scorch and yellow the leaves — usually concentrated on whichever side faces the light, and appearing not long after a move into a brighter spot.
Fix: move it back from direct sun or filter the light with a sheer curtain.
Nutrient deficiency
Less common than the watering causes above, but a plant that's gone a long stretch without feeding can show a fairly even yellowing across its older leaves while new growth stays green.
Fix: feed with a balanced liquid houseplant fertilizer during spring and summer, following label dilution — but only after confirming the roots are healthy, since feeding a plant already dealing with root rot won't help.