Wales international Peel gets the nod ahead of Irishman Guy Easterby, despite Easterby's man-of-the-match performance against Swansea last week.
Llanelli director of rugby Gareth Jenkins has also brought in powerhouse Scott Quinnell to the backrow, while try-scoring prop Martyn Madden can only make the bench.
Jenkins said there was a lot of competition for a starting jersey at Llanelli and it was a good position to be in.
"I've only got one injury - Salesi Finau (knee) - and that enables me to name my strongest side. There is fierce competition in several positions in the squad, and there are obviously a few disappointed players."
Llanelli need to beat Bourgoin to keep their Cup campaign on the rails, and Jenkins is aware of the task facing his side.
"They've got the best scrum in France and the biggest pack of anyone we've played in Europe, so Friday is going to be a tough night at the office."
Bourgoin beat Llanelli 38-54 in the second round of the Heineken Cup.
Llanelli: Barry Davies; Mark Jones, Matthew Watkins, Leigh Davies (capt), Garan Evans; Stephen Jones, Dwayne Peel; Iestyn Thomas, Robin McBryde, John Davies, Vernon Cooper, Chris Wyatt, David Hodges, Simon Easterby, Scott Quinnell.
Replacements: Martyn Madden, Marcus Thomas, Luke Gross, Dafydd Jones, Guy Easterby, Gareth Bowen, Matt Cardey.