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Born in Omaha, Nebraska, USA, as Betty Ann Isaacson, Peterson was one of the first members admitted to New York's Actors Studio. As an actress she divides her time between film, television, and Broadway. She is known for Another World (1964), Dragnet (1987), and Pigeon Feathers (1988) She guest starred in many early television productions, including Hallmark Hall of Fame (1951), Inner Sanctum (1954), and CBS Television Workshop (1952). Besides "Another World", she also had continuing roles in Search for Tomorrow (1951), Young Dr. Malone (1958), and A Flame in the Wind (1964). She was married to Daniel Patrick O'Connor from 1948 until his death in 2015.