He was born in Metuchen to parents that had been slaves owned by the Mundy family.
He was a school custodian in Perth Amboy. He was active in the Republican Party and became the city's first African-American to hold elected office, on the Middlesex County Commission. He was also the city's first "colored" person to serve on a jury.
Decades later, the school Peterson previously worked at was renamed after him.
In New Jersey each 31st of March is marked as Thomas Mundy Peterson Day to mark the rights of all citizens to vote.