Peter was born to Palmer and Opal Cortlandt on Christmas Eve in 1992. Opal, who thought she had entered menopause, was surprised to learn that she was pregnant. Palmer was equally surprised to learn of Opal's pregnancy because he thought that a riding accident many years earlier had left him sterile. A DNA test finally proved to Palmer that Opal hadn't been unfaithful, and that Peter was his son.

A growing Peter Cortlandt proved to be a handful for most of his nannies, one of whom was Kendall. He was ultimately sent away to boarding school.

Peter returned to Pine Valley on July 11, 2008, and began to socialize with his childhood friend, Colby Chandler. He soon realized that he was falling in love with Colby, but she did not return his feelings. In the meantime, Peter entered into a deal with the devil when he hatched a plan with Adam Chandler to taint Fusion's new perfume, Bella, with a chemical that would cause an allergic reaction in anyone who came into contact with it. Negative press coverage about the sabotaged perfume was meant to devalue Fusion's stock, making the company more vulnerable to being seized by Adam.

Peter put his plans to attend Harvard temporarily on hold while he worked at Fusion. At every opportunity, Peter continued his attempts to gain Colby's attention and affection. He eventually succeeded in getting Colby to spend time with him, but their friendship never truly developed into anything more.

In late 2009, Opal revealed that Peter has left Pine Valley and was living in Switzerland, where he'd become enamored by a Swiss "snow bunny."