The label was founded by Paul "Hammy" Halmshaw (of the bands Instigators and Civilised Society, as well as a former drummer of Sore Throat) in Dewsbury, England, in 1987.

The label is therefore known for the connection between doom metal and the 1980s English crust punk scene.

Sister labels 'Deaf' and 'Dreamtime' concentrated more on thrash metal (Deaf) and psychedelic electronica (Dreamtime).

However, the bands My Dying Bride, Darkthrone, Katatonia, Autopsy, Anathema, Paradise Lost, and Opeth - known as the 'Peaceville Stable' - have been the label's most recognizable acts since the 1990s.

In November 2006, after 25 years at the helm, Halmshaw announced that he and co-manager Lisa Halmshaw would be leaving the label to concentrate on new projects, and that his former assistant, Paul Groundwell, would be taking over general management duties,[1] following the sale of the label to back catalogue specialists Snapper Music, who had distributed Peaceville since 2001.