In 1976, Peterson began to collaborate with John Gray again, writing Billy Bishop Goes to War. The play, which premiered in Vancouver in 1978, went on tour internationally, garnering positive reviews on Broadway, where Peterson won the Clarence Derwent Award for most promising performer, in London's West End. He was also nominated for Best Actor ) at the Edinburgh Festival Mainstage. In 1998, Peterson acted in the play once more at the Canadian Stage in Toronto.