Niels Petersen was born on October 21, 1845, to Peder Mikkelsen and Gunder Marie Nisdatter in Vilslev, Denmark, a small farming village in the southwestern portion of that country.

He filed a declaratory statement on July 1, 1874, claiming 160 acres (0.65 km2) in section 29, southwest of Tempe (the original homestead is currently bordered by Priest, southern, Alameda and 52nd Streets).

Petersen served as a trustee for the Tempe School District and was a member of the Maricopa County Board of Supervisors, thus asserting his interest in local education.

Other positions held by Petersen included treasurer of the Tempe Irrigating Canal Company, president of the Farmers and Merchants Bank, and a term on the Arizona's Eighteenth Territorial Legislature from 1895 to 1896.

While the new home was being built, Petersen traveled back east, where he met his future bride Susanna Decker of South Montrose, Pennsylvania.

Originally buried in Tempe's Double Buttes Cemetery, he was exhumed and reburied on the grounds of his home next to the grave of his wife Susanna.

The house was built for Petersen who came to Tempe in 1871 and developed substantial land holdings, was president of a local bank, co-founder of the Methodist Episcopal Church, and representative at the 18th Territorial Legislature.