His childhood was spent in San Francisco at the Fielding Hotel, a Union Square hotel owned by his adoptive parents.He graduated from the University of California at Berkeley. He was an Army combat medic in the 86th Division, during World War II. He studied at San Francisco State College.
He was writer-in-residence at Reed College, Portland, Oregon from 1969-1971. After leaving Reed College, Peterson lived in Taos, New Mexico. He started his own publishing company, Black Dog Press, in the Bay Area, and created artworks that showed in local galleries. He also served a writer-in-residence at Oregon's Willamette University from 1991-1992.
His papers are held at University of California Santa Cruz.