In February 1966, former prime minister Sir Robert Menzies resigned, triggering a by-election in Kooyong, the eastern Melbourne electorate that he had held for 32 years. Peacock gained Liberal preselection, making him the favourite in this comfortably safe Liberal seat. The Liberals (and their predecessors) had held the seat since Federation, usually without serious difficulty. As expected, he won the 2 April by-election, albeit with a slightly reduced majority. He easily retained his seat in the general election held seven months later. In 1969 he was appointed Minister for the Army and in this role played a minor part in the drama which brought down then prime pinister John Gorton in 1971. In 1972, William McMahon made him Minister for Territories, in charge of Australia's colonial possession, Papua New Guinea, where he was responsible for bringing in self-government.