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.
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.