Peters was born Peter Clarke, the second of four sons, in New York, and grew up in Englewood, New Jersey. At the age of 12, he had his first theater experience, in a school production of My Fair Lady. He began to have serious ambitions to work in the theater at the age of 14. He graduated from Dwight Morrow High School in 1970.
In 1971, Peters' elder brother enabled him to work as a costume designer for a production of the musical Hair in Paris, in which he later starred. While there, he received a letter from the FBI that accused him of draft evasion. When he went to New Jersey to contest his charge, he said "if the enemy comes to America, I'll be there, but I don't know the Vietnamese. If you put me in the army, I'm not going there."
In 1973, he moved to London, and changed his name to Clarke Peters because Equity already had a few namesake members. While in London, he formed a soul band, The Majestics, and worked as a backup singer on such hits as "Love and Affection" by Joan Armatrading, "Boogie Nights" by Heatwave, and some David Essex songs. However, music was not Peters' main ambition, and he preferred to work in the theater.
His first West End theatre musical roles, which he received with assistance from his friend Ned Sherrin, were I Gotta Shoe (1976) and Bubbling Brown Sugar (1977). Other West End credits include Blues in the Night, Porgy and Bess, The Witches of Eastwick, Chicago, and Chess. In 1981, Peters starred in the Sean Connery space Western Outland as the treacherous Sgt. Ballard, and had an almost wordless role as Anderson, a vicious pimp in Neil Jordan's Mona Lisa in 1986.
After writing several revues with Sherrin, in 1990 Peters wrote the revue Five Guys Named Moe, which received a Tony Award nomination for Best Book of a Musical. He followed this up with Unforgettable, a musical about Nat King Cole, which received scathing reviews. He also starred in the 2010 UK production of Five Guys Named Moe.
Peters has had five children from three relationships. He and his first wife, Janine Martyne, who sang with him on recordings, had two children: a daughter, China Clarke, an Architect, and a son, Peter Clarke, a tattoo Artist. A subsequent relationship with Joanna Jacobs produced two sons: Joe Jacobs, an actor, and Guppy, who died of a kidney tumor at the age of four in 1992. He has a son, Max, with his second wife, Penny; Max played the young Michael Jackson in the West End production of the musical Thriller – Live.
As an actor, he has appeared on Broadway in The Iceman Cometh (1999), which won him the Theatre World Award, and as shady Lawyer Billy Flynn in the revival of Chicago in 2000 and 2003. In regional theatre he has appeared in Driving Miss Daisy, The Wiz, Bubbling Brown Sugar, Ma Rainey's Black Bottom, Carmen Jones, and The Amen Corner.
Peters splits his time between a house in the Charles Village section of Baltimore, which he bought in 2006 while working on The Wire, and one in London, where Penny and Max live.
Peters appeared in two episodes of the U.S. time-travel/detective TV series Life On Mars (2008) as NYPD Captain Fletcher Bellow.
He also appeared in the UK show Holby City, as Derek Newman, the father of nurse Donna Jackson. He voiced a part in the Doctor Who animated episode Dreamland, and in the In Plain Sight episode "Duplicate Bridge" as a man in Witness Protection named Norman Baker/Norman Danzer. He played Nelson Mandela in the 2009 film Endgame, and Bishop Enoch in Spike Lee's 2012 film, Red Hook Summer. In 2010, Peters read Rita Hayworth and Shawshank Redemption for BBC 7. In that year, he also had a guest appearance as Professor Mark Ramsay in the pilot episode of the USA Network TV series Covert Affairs.
In September 2011, Peters appeared on stage in a Sheffield Crucible Theatre production of Shakespeare's Othello, playing the title role opposite his Wire co-star Dominic West, who played Iago.
Since 2012, Clarke Peters has had a recurring role as Alonzo D. Quinn in the CBS TV series Person of Interest.
He has played Gloucester in King Lear at the 2014 New York Shakespeare in the Park festival.
