Peterson joined the United States Hockey League's Thunder Bay Flyers for the 1990–91 season, at the age of eighteen. In 48 regular season games, he recorded 27 goals and 40 assists, and added eight goals and nine assists in 10 playoff games. In 1991–92, Peterson began playing college hockey with the Western Collegiate Hockey Association's Michigan Tech Huskies. After scoring 20 points in the 1992–93 season, Peterson increased his point total to 42 in 1993–94. In 1994–95, he scored 25 goals and had 21 assists; both totals were the highest of his college career, as was his 46 points. Peterson's statistical production declined slightly in his last college season, 1995–96, as he posted 20 goals and 16 assists.