Peter was born in Evanston, Illinois and grew up in Oak Park, where he attended Ascension School and Fenwick High School before studying at Quigley and St. Mary of the Lake-Mundelein seminaries. He earned his Masters in Adult Education and Organization Development at Boston University.
Peter wrote the hymn "They'll Know We Are Christians by Our Love" while he was a parish priest at St. Brendan's on the South Side of Chicago in the 1960s. At the time, he was leading a youth choir out of the church basement and was looking for an appropriate song for a series of ecumenical, interracial events. When he couldn't find such a song, he wrote the now-famous hymn in a single day. His experiences at St. Brendan's, and in the Chicago Civil Rights movement, influenced him for the rest of his life.
After working in the public sector in Lynn, Massachusetts and Madison, Wisconsin, Peter became a consultant with Joiner Associates in the 1980s, traveling the globe to help businesses engage employees' talents more fully, humanely, and effectively. He co-authored The Team Handbook, which was named one of The 100 Best Business Books of All Time (in the book of that title). After starting Scholtes Seminars and Consulting, he wrote the classic The Leader's Handbook in 1998, which made the definitive case against performance appraisal—a practice he argued was demoralizing and wrong.