Jacob Peterson began his travel experience playing with the Portage Soccer Club. He also played high school with Portage Northern High School Huskies. He was a member of the Region II Olympic Development team from 1998-2003 and the Michigan State ODP team from 1998-2002. As a member of the U-17 Men's National team, Peterson trained at the IMG Academy-Bolletieri Campus in Bradenton, Fla., from 2001-2003 and was a 2003 PARADE Magazine All-American
He went on to play college soccer at Indiana University for three years from 2003 to 2005 where he scored 30 goals with 44 assists in 71 appearances. He was named 3rd team all American selection his freshman year, all big ten selection and 3rd team all-Midwest region team his sophomore year. His junior year he was named 3rd team NSCAA Adidas All American, 3rd team All American by College Soccer News, 2nd team selection by Soccer Times, 1st team All-Big Ten and NSCAA All-Great Lakes Region selection and named one of 15 semifinalists for the Missouri Athletic Club (M.A.C.) Hermann Trophy.
Later in 2005 Peterson made 12 appearances, eight international, with the Under-20 National team in 2005. He had 11 career caps for the U20s with three career goals. He played in all four matches at the 2005 FIFA World Youth Championship and started and scored the game-winner for the U.S. against Egypt in the WYC.
Peterson was drafted in the second round, 21st overall, of the 2006 MLS Super Draft by Colorado Rapids. He was a major part of the Rapids midfield from 2006 to 2009, amassing over 100 appearances for the club in all competitions.
On January 21, 2010, Peterson was traded to Toronto FC in exchange for allocation money. He made his debut for the club as a sub against Philadelphia Union April 15, 2010. Peterson scored his first goal for Toronto in the CONCACAF Champions’ League group stage versus Real Salt Lake in a 1-1 home draw on September 28, 2010. A couple weeks later on October 16, 2010 Peterson scored his first league goal for Toronto in a 2-2 home draw versus Columbus Crew. After a disappointing first half of 2011 Peterson was traded along with Alan Gordon and Nana Attakora to San Jose Earthquakes for Ryan Johnson, allocation money, and an international roster spot.
Peterson remained with San Jose through the 2011 season. At season's end, the club declined his 2012 contract option and he entered the 2011 MLS Re-Entry Draft. Peterson was not selected in the draft and became a free agent. Sporting Kansas City announced January 19, 2012 that the club had signed 25-year-old forward Peterson.