Peterson was born October 23, 1928, in Everett, Washington, where he grew up in the Mission Covenant Church. He married Grace Brownlee on July 14, 1950. She survives.
Peterson earned his Bachelor of Arts degree from Wheaton College and his Master of Divinity from North Park Theological Seminary.
Peterson was a longtime missionary to Japan, beginning in 1955. For part of the time, he served as director of the Covenant Seminary in Tokyo. He also was pastor of Bethel Covenant Church in Prince Albert, Saskatchewan, and the Evangelical Covenant Church in Kewanee, Illinois. Peterson retired in 1993.
Survivors include two daughters, Joy Huebner and Janet Landholm; and a son, Jim who is a Covenant missionary in Japan serving with his wife, Hydi Peterson.