Peterson was established in 1856. In 1862 a fort was built in Peterson by settlers to defend against anticipated Dakota attacks during the Dakota War of 1862. The fort was never attacked. The blockhouse from this fort still stands near its original location at the corner of Second and Park. The Peterson Patriot has been in print since 1880. The Peterson sesquicentennial was celebrated August 3–5, 2006.
This historical town is located in the extreme SW portion of Clay County, Iowa on Highway 10. The Little Sioux River flows from the south to the west and nourishes the tree covered hills surrounding the town.
Located in the Little Sioux River Valley, Peterson is an active community filled with history and a number of museums, all of which are open on special days and any time by appointment.
Peterson is the home to three museums and five additional historic structures, including the first frame home built in Clay County, an early frame school house, and the only remaining fort in Clay County from the 1860s: the Fort Peterson Block House.