Peterson was born in 1953 and raised in the Gold Coast town of Kirra, brought up by a single mother who ran a local pool hall. He bagan surfing at age 11 and dropped out of school at age 16. Peterson regularly surfed the bullet-fast point breaks Kirra and Burleigh Heads with Wayne Bartholomew and Peter Townsend. Michael earned a living by shaping surfboards. He was featured in Albert Falzon's 'Morning of the Earth' as well as other surf films.

Michael frequently surfed in contests, many of which he won. Tense and introverted, Peterson usually arrived on the beach just seconds before a match was due to start; he gave mumbled, head down acceptance speeches at contest awards presentations, or didn't bother showing up at all. By 1975, his paranoia was such that he hid in the parking lot after winning his third consecutive Bells Beach title, convinced that if he walked up to accept his prize check, spectators "were going to start throwing things at me".

In 1982 he quit surfing altogether. The next year he was arrested after a high speed car chase from Kirra to Brisbane. He told police he was a CIA agent and was being followed by Russian spies. Diagnosed as paranoid schizophrenic, Peterson was institutionalized, then released to the care of his mother. He never married. On March 29 2012, Peterson died of a heart attack whilst inside his Australian home at Tweed Heads South, New South Wales; he was 59 years of age."  - TEOS