Born near Lowell, Indiana, Peterson attended public schools. He was admitted to the bar in 1870 and commenced practice in Crown Point, Indiana.
He served as prosecuting attorney of the thirty-first judicial circuit 1880-1884.
Peterson was elected as a Democrat to the Sixty-third Congress (March 4, 1913 – March 3, 1915). He was an unsuccessful candidate for reelection in 1914 to the Sixty-fourth Congress. He resumed the practice of law in Crown Point, Indiana. He also engaged in banking and served as president of the Commercial Bank, Crown Point, Indiana, and of the First Calumet Trust & Savings Bank of East Chicago, Indiana, until 1939, when he retired. He died in Crown Point, Indiana, July 16, 1944, and was interred in Maplewood Cemetery.