Peete was born in Mesa, Arizona. He attended Sahuaro High School in Tucson, as a freshman, sophomore, and junior, and went to Shawnee Mission South High School in Overland Park, Kansas, for his senior year. He was a three-year letterman in football, basketball, and baseball. In football, he was named the Arizona High School Player of the Year as a junior. Peete was drafted in the 30th round (722nd overall) by the Toronto Blue Jays in the 1984 Major League Baseball draft. He did not sign and elected to attend college at the University of Southern California. He is the son of Willie Peete, former running backs coach of the Kansas City Chiefs and the Chicago Bears. His brother is NFL coach Skip Peete.
Peete was the first player ever from USC to win the Johnny Unitas Award as the nation's best senior quarterback (since earned by Carson Palmer and Matt Leinart as well). In that senior year, he also finished second to Barry Sanders in the voting for the Heisman Trophy. His USC teams would win both head-to-head matchups in the UCLA–USC rivalry against Troy Aikman's UCLA teams. The 1988 UCLA-USC game was notable in that Peete was stricken with measles the week before the game and had been hospitalized. He led USC to the 1988 and 1989 Rose Bowl games.
Peete was also a star third baseman on USC's baseball team. He was named to the all-Pac-10 team. He was drafted three different times while at USC. In the 1988 MLB draft by the Oakland Athletics in the 14th round (359th overall), the 1989 MLB draft by the Athletics again in the 13th round (348th overall) and the 1990 MLB draft by the Detroit Tigers in the 28th round (742nd overall).
Peete did not achieve stardom in his professional career in the NFL, but played well enough to sustain his place in the league for 16 seasons, primarily as a backup. Selected by the Detroit Lions as the 141st pick in the 6th round of the 1989 NFL Draft, Peete was scheduled to start the season opener but sprained his knee in an exhibition game against the Los Angeles Rams, missing the first few games of the season. He would have been the first rookie quarterback to start for the Lions since 1968, when Greg Landry started.
After a weak showing in the first half of 2003 season opening game against the Jacksonville Jaguars, head coach John Fox replaced him in the third quarter with Jake Delhomme, who then led the Panthers to a comeback victory. Delhomme subsequently replaced Peete as the Panthers' starting quarterback, leading the team to an 11–5 record that ultimately led to Super Bowl XXXVIII against the New England Patriots.
The Panthers released Peete to free agency in February 2005 for salary cap reasons, but he chose to retire instead of re-signing with a team for another season. Peete finished his career with the most NFL career passing yards among QBs from USC, a record that was eventually eclipsed by Carson Palmer.
After his retirement from the NFL, Peete became one of the hosts of the Fox Sports Networks sports talk showThe Best Damn Sports Show Period alongside John Salley, Chris Rose and Rob Dibble. In 2015, the Oprah Winfrey Network announced that they were making a docuseries on Peete and his family.
Rodney Peete and his wife Holly Robinson Peete star in Lipozene commercials on television.
In 2019, Rodney Peete co-hosted the Hallmark Kitten Bowl.
Peete has been married to actress Holly Robinson Peete since 1995. They have four children: twins, daughter Ryan Elizabeth Peete and son Rodney Peete, Jr. (born October 19, 1997), son Robinson James Peete, (born August 11, 2002), and son Roman Peete (born February 25, 2005).
One of their twins, Rodney Jr., was diagnosed with autism at age three. He tells of his story of Rodney, Jr., in the June 2010 issues of Men's Health.
In November 2013, Peete was named as a 2014 recipient of the NCAA Silver Anniversary Award, given annually to six former college athletes 25 years after the end of their college athletics careers.
Peete is the son-in-law of late actor Matt Robinson, and cousin of the late professional golferCalvin Peete.