St Peter's is a late medieval church with 18th and 19th century additions. 


A church is believed to have existed on the site from at least the early 1400s, on the basis of a brief reference to a 'Chapell in the Holme ton' (Peel) in a garrison roll document of 1428.  


The survival of an opening for a piscina in the chancel suggests that parts of the building at least are of pre-Reformation origin.  


The church appears to have been extended as part of Bishop Thomas Wilson's rebuilding programme, presumably in the first quarter of the 18th century.  Seating in the church was repaired and re-ordered in 1734 but was already in need of repair in 1758. A west gallery, funded by several well-to-do parishioners, was inserted in 1764.  This, and galleries in the north and south transepts, are mentioned in a description written in 1798.  The galleries were altered in 1826 as part of major works to the church which also involved the raising of the roof and the coving-in of its underside, the replacement of seating, and the provision of a new pulpit and reading desk.  


In 1872, a tower was added at the west end of the church to accommodate a clock which had been presented to the town of Peel by James Kewley Ward, one of its emigrant sons who had found fortune in Canada; he later also built a public library for the town which still bears his name.


The church served the parishes of Patrick and German until 1714, when a new church was completed in Patrick as part of Bishop Wilson's building programme.  It then served as the parish church for German until the completion of the new church (now the cathedral) in 1884, though still remained in occasional use until 1893, when the newer church was consecrated. 


In 1902 it was converted for use as a mission church and all the pews, and both north and south galleries, were removed.


A fire resulted in the church being deemed unsafe and in late 1958 it was demolished down to its present level, leaving just the cruciform outline, the east chancel gable with its window, and the westerly clock tower.  


At the same time, gravestones from the surrounding cemetery were removed as part of the demolition and arranged inside the walls of the church.  Some were positioned as ledger stones along the axes of the nave and transepts, and were relaid in 2020 as the culmination of works to regenerate the adjoining market place.