Irma Peterson was born in the late 1800s or early 1900s to John G. Peterson and Marie Jensen Peterson, along with her sister, Margaret Peterson.

They lived on Telephone Hill in the Peterson-Kasnick House, which they built at 203 West Third Street.

In April 1899, Peterson staked a placer claim on the creek which now bears his name. He called it Cheechako Creek and one of its tributaries Goose Creek, and named the valley Prairie Basin. Later in the same year the lake was called Reservoir Lake in the mining records. By 1905 it had become known as Peterson Lake.

Peterson sold his store to devote all of his time to mining. His principal lode claim was half a mile east of the lake and was first reached by trail from Tee Harbor.

Later Peterson built his home at Pearl Harbor and hewed out a wagon road from there to the mine, where he installed a three-stamp mill. He operated the mine until shortly before his death which occurred on August 20, 1916.

Marie operated the mine several years along with Irma and Margaret.

The present Peterson Lake Trail follows the old wagon road, leaving Glacier Highway at Mile 24. Peterson Lake is located on the mainland 16 miles northwest of Juneau and a mile from tidewater at Tee Harbor.