In the spring of 1982, Peterson was contacted by the owners of a new team in Philadelphia scheduled to play in the United States Football League. After conversations with partners Myles Tannenbaum, Harold Schaeffer and Arthur Powell, he was convinced to join the new venture. In July 1982, Peterson was hired as president, general manager and part owner of the franchise that would eventually be named the Philadelphia Stars. When Peterson began his new job, the team did not have offices, other employees, a practice field or training facilities. He did however, have a head coach, as he was hired along with George Perles, then the defensive coordinator of the Pittsburgh Steelers. Peterson began the process of finding everything from offices, to players, to assistant coaches, to paper clips and a coffee-maker. The birth of the Stars was marred when Perles left in December 1982 to take the head coaching job at his alma mater, Michigan State University. With a first training camp just six weeks away, Peterson worked quickly to find a replacement, hiring New England Patriots defensive coordinator Jim Mora Sr., who he had worked with at UCLA under Vermeil. Together, they assembled the most successful team in the league's three-year existence, playing in all three USFL Championship Games, and capturing titles in 1984 and 1985. Their key players came from many different avenues: starting QB Chuck Fusina had failed in two chances in the NFL, while undersized middle linebacker Sam Mills was teaching high school photography after failing to stick in training camps in the NFL (Cleveland Browns) and Canadian Football League (Toronto Argonauts.) Through the USFL Drafts, Peterson added talented players like RB Kelvin Bryant from the University of North Carolina, OT Irv Eatman from UCLA and C Bart Oates from Brigham Young University in early rounds, and later finding CB Antonio Gibson from the University of Cincinnati and P Sean Landeta out of Towson State University. All were major contributors over three seasons in the playoffs. The 1984 team was the most impressive, finishing 19–2 on the season and beating the Arizona Wranglers in the title game. But it was the '85 title team that was the most remarkable. The Stars became a commuting team, having been knocked out of their former home at Veterans Stadium in Philadelphia because of the USFL's plans—led by New Jersey Generals owner Donald Trump—to move from the spring to a fall schedule. That forced them to become the Baltimore Stars, playing that season at Byrd Stadium on the campus of the University of Maryland. Still, they were able to win the league championship, beating the Oakland Invaders, 28–24. The Stars' 48–13–1 overall record during regular and postseason play, amassing a 7–1 postseason record, was the best of any USFL club. Due to that success, Peterson's efforts were rewarded in 1983 and 1984, when he was named The Sporting News' USFL Executive of the Year. His players went on to great success in the NFL, as five Stars were named to 18 spots in the NFL Pro Bowl: Mills and Oates (5 times each), DL William Fuller (4), Landeta and LB Mike Johnson (2 each.) Mills was voted into the Pro Football Hall of Fame with the class of 2022. The Stars coaching staff produced four NFL head coaches: secondary coach Dom Capers (Carolina), defensive coordinator Vince Tobin (Arizona) and defensive assistant Vic Fangio (Denver) and head coach Jim Mora Sr. who went on to serve as head coach over 15 seasons for two different NFL teams: New Orleans Saints (1986–96) and Indianapolis Colts (1998-2001), finishing with a 125–106 record. Not only did Peterson have an eye for playing talent, he discovered scouts/talent evaluators for the Stars who would go on to become NFL general managers: Bill Kuharich (Saints), Rod Graves (Cardinals) and Terry Bradway (Jets.) Peterson possessed the USFL championship trophy from the league's folding until 2018 when he donated the trophy to the Pro Football Hall of Fame.