Peterson says that while she has no memory of the event, she appears to have posed for the cover of Tom Waits' album Small Change (1976). She had a small role as a showgirl in the James Bond film Diamonds Are Forever (1971) and played a topless dancer in the film The Working Girls (1974). Immediately after graduating high school, she drove back to Las Vegas, where she became a showgirl in Frederic Apcar's pioneering "Vive Les Girls!" at The Dunes there, she met Elvis Presley, with whom she went on a date.
Inspired by Ann-Margret in the film Viva Las Vegas, while on a trip to Las Vegas, Nevada, during high school, she convinced her parents to let her see a live show where she was noticed by the production staff despite being only 17 years old, she convinced her parents to let her sign a contract. During her teens, Peterson worked as a drag queen go-go dancer in a Colorado Springs, Colorado gay bar and as a go-go dancer for soldiers at Fort Carson. In elementary school, she watched House on Haunted Hill, which was the first horror film she ever saw. In a 2011 interview, Peterson stated that as a child, she was more fascinated by horror-themed toys while other girls were occupied with Barbie dolls. However, in her interview on the podcast Inside of You hosted by actor Michael Rosenbaum, Peterson stated that her scars were the result of a fire.
When she was a toddler, she was scalded by boiling water, which required skin grafts to cover over 35% of her body to heal, resulting in her having to spend three months in the hospital.