In B→Xsγ, there are perturbative QCD corrections at order αs not only to the single quark line process b→sγ but also coming from a set of diagrams where the weak interaction vertex involves a gluon which interacts with the spectator quark in the B hadron. We discuss the impact of the full set of these diagrams. These can influence the decay rate and also the line shape of the photon spectrum as they favor a softer photon energy than does the pure spectator decay b→sγ. A subset of these diagrams generates differences in the decay rates for charged and neutral B’s, B+→Xsγ vs B0→Xsγ, which can be searched for experimentally, although our calculation indicates that the effect will be hard to observe. Bound-state effects turn out to be required to give rise to spectator corrections to the decay rate at order αs. The resulting contribution to the total rate is rather small (of about 5%), although the effect is somewhat larger on portions of the photon spectrum. © 1996 The American Physical Society.