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In 1874, lots were laid out and one of the first trout hatcheries in Minnesota was begun in Peterson. In 1876, the telegraph was brought in and in 1877 the present depot (now the Peterson Station Museum) was erected. Peterson, incorporated in 1909, is located 39 miles west of LaCrosse on Highway 16.
The town has an RV camp located in the city park with electric outlets, water and restrooms. Peterson is surrounded by trout streams and hunting areas and the Root River provides canoeing opportunities. Nearby is the Peterson Fish Hatchery. And, the Root River State Trail runs through town on the old railway line.