A football player in college, Petersen has been well cast as screen sportsmen. He made his TV debut playing a womanizing team manager in "Long Gone" (HBO, 1987), a highly regarded cable telefilm set in the world of minor league baseball. Petersen subsequently acted in several mild comedies including "Cousins" (1989), "Hard Promises" (his producing debut) and the dark comedy "Passed Away" (both 1992). A youth spent in rural Idaho served him well as he played a classic Western law man, Sheriff Pat Garrett, pursuing Emilio Estevez's Billy the Kid in "Young Guns II" (1990). Petersen donned cowboy duds again for the popular TV miniseries sequel, "Return to Lonesome Dove" (CBS, 1993).

Petersen has remained active on the stage, particularly with Chicago's Remains Theatre, an avant-garde company which he and several others formed in 1979 as Ix. His several Joseph Jefferson Awards for work in Chicago theater include honors for "In the Belly of the Beast" and "Tooth of Crime". Petersen made his Broadway stage debut in a 1996 production of Tennessee Williams' "Night of the Iguana".

Generally shying away from the spotlight, Petersen assumed a higher profile after forming a film and TV production company, High Horse Films, with his partner Cindy Chvatal in 1986. He has been producing works of a more literary nature than the norm for Hollywood. A case in point was "Keep the Change" (TNT, 1992), a thoughtful TV-movie based on a Tom McGuane, in which Petersen starred as an emotionally conflicted California artist who returns to the sanctuary of his native Montana. He has also been popping up in more commercial fare on film and TV. Petersen battled a mysterious sea creature in the Peter Benchley miniseries "The Beast" (NBC, 1996) and announced plans to star in an hour-long drama series on NBC that would be co-produced by High Horse Films. On the big screen, he attempted to protect his teen-aged daughter from a psychopathic Mark Wahlberg in the James Foley-helmed thriller "Fear" (1996).