In 1961, Peter, parents Sheila and Claude, and his sisters Barbara, Shirley and Pamela, moved to Woking. Davison first became interested in acting at school when he took part in school plays. He then joined the Byfleet Players, an amateur dramatic society.
Peter left school at 16 with three O levels and took jobs varying from hospital porter to file clerk in the Tax Office. He was accepted into the Central School of Speech and Drama, where he stayed until 1972.
Upon leaving Drama school, Peter worked for three years in repertory theatre. He met Sandra Dickinson during a run of A Midsummer Night's Dream at the Edinburgh Festival in 1975 and they married in 1978. His daughter, Georgia Elizabeth, was born in 1984 and he split with Dickinson in 1993.
In addition to acting, Peter Davison has also dabbled in songwriting and has provided the themes to Button Moon and My Hero. Davison is currently living with partner Elizabeth Morton and they have two sons, Louis and Joel.