Colbjørnsen was born at the Sørum vicarage at Romerike in Akershus, Norway.

He was the son of parish priest Colbjørn Torstensen Arneberg (1628-1720) and Catharina Kjeldsdatter Stub (1653-1731).

He established himself as a trader in the early 1700s, where his uncle Niels Kjeldsen Stub (1638-1721) already had significant lands.

Peder Colbjørnsen was chief of the civilian resistance of Fredrikshald at the battles in 1716 and 1718.

Colbjørnsen was appointed to Lieutenant Colonel of infantry by King Christian VI of Denmark in 1733.