Petersen went to Marshall University after a stellar career at Delta Community College in Stockton, California. He was drafted by the Kansas City Royals after his first season at Delta C.C. As a football player at Marshall, Petersen was named the 1988 Southern Conference Athlete of the Year and the Southern Conference Offensive Player of the Year in 1987. Petersen set 16 Southern Conference single-season and career records in passing and total offense, to go along with six Marshall single-season school marks. He threw a record 35 touchdown passes in 1987. Petersen also set NCAA records for most passes in a game without an interception (68) and for most regular season games (11) with more than 200 yards passing. Peterson also played on the Herd's baseball team.