Why are peanuts called nuts when they're not? Peanuts are actually legumes related to beans and lentils. Unlike tree nuts, peanuts grow underground in pods after the plant's flowers pollinate. They earned the nut label centuries ago because of their similar taste and use in cooking. Interestingly, this mislabeling has caused confusion and allergies. Some people with tree nut allergies can eat peanuts while others cannot. Peanuts are also packed with protein and have played a major role in feedin