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Peterson was born in Boise, Idaho, but was raised most of her life in Colorado. At the age of 4 she worked a bit on the show Perry Mason, and from the age of 10 she continued to gravitate towards an acting career. She starred in her first major lead, at the age of 15, in her first film Homecoming opposite Anne Bancroft. From then on, she went to work on other films and television projects.