His grandfather Carl Friedrich Petersen had officiated as Hamburg's head of government (first burgomaster) until his death in 1892.

After in 1906 Hamburg's new suffrage law (nicknamed Wahlrechtsraub, i.e. suffrage robbery) increased the influence of voters paying high taxes on the expense of others, which Petersen opposed, he joined the newly formed faction of the United Liberals [de], one of the predecessors of the post-World War I DDP.

In this function Petersen continued into the Weimar Republic, until the complete senate resigned on 27 March 1919, thus ending the life-term mandates under Hamburg's old 1860 constitution.

On 4 March 1933 he resigned from office as First Mayor and senator, unwilling to execute orders he considered illegal given by Hitler's new government.

After the end of Hitler's reign the Control Commission for Germany - British Element appointed his younger brother Rudolf Petersen First Mayor in 1945.

In the debate that arose after the words of Mr. Petersen, he was the mayor of Hamburg at the time, the disheveled and tattered figure of Adolf Hitler suddenly stood up from the crowd of listeners.

Instead of replying to the substance of things, the young man struck by the sick hatred for Jews burst out with hateful anti-Semitic words, he accused Peterson that his mother is Jewish.