PIIE conducts research, provides policy recommendations, and publishes books and articles on a wide range of topics related to the US economy and international economics.

[2] PIIE's origin can be traced back to an urgent request sent to the German Marshall Fund from C. Fred Bergsten, then assistant secretary at the Treasury Department during the Carter administration, in 1980.

Anthony M. Solomon (the Undersecretary of the Treasury for Monetary Affairs and President of the Federal Reserve Bank of New York) and Richard N. Cooper (a consultant to the U.S. National Security Council) also joined the IIE in the early 1980s.

At its conference in New York, NY, a number of major economic figures attended: Alan Greenspan, former Federal Reserve Board Chairman; Robert Rubin, former Secretary of the Treasury; Jean-Claude Trichet, Governor of the European Central Bank, among others.

[non-primary source needed] In 2001 the Peterson Institute moved into a building it commissioned and built at 1750 Massachusetts Avenue ("Embassy Row"), NW, Washington, D.C.

The building houses several pieces of art donated by Stephan Schmidheiny, a former director of the institute, including a sculpture by Joan Miró and a painting by Elizabeth Murray.

[10] A contemporary review by Washington Post architectural critic Benjamin Forgey observed that "this is a very pretty building, lovely to look at on its own," finding its proportions "satisfying" and its workmanship "superb".

[11] In an opinion piece for The New York Times published in 2016, Steven Rattner called the new building of the Peterson Institute "the locker room of the Team Globalization and Free Trade cheering squad".