Peto was born in Emery Down, near Lyndhurst, Hampshire. Her father, Morton Kelsall Peto, was a builder and noted landscape artist, and her grandfather was Sir Morton Peto, 1st Baronet. She was educated at home and began writing novels. She was not successful in this endeavour and in 1914 joined the National Union of Women Workers women patrols, an unofficial organisation which patrolled the streets to maintain public morality and decency. She was Assistant Patrol Organiser in Bath and from January 1915 was deputy director of the NUWW's patrol training school in Bristol. In 1917 she succeeded Flora Joseph as director of the school and in 1918 also became director of the Federated Training Schools for Policewomen and Patrols, which also included the schools in Liverpool and Glasgow.
In 1919 the schools closed and Peto attempted to obtain a position as an attested police officer, as several police forces were now recruiting women. She had some difficulty, particularly since she was not willing to accept a rank lower than Inspector, and in November 1920 accepted an unattested position as a Female Enquiry Officer with Birmingham City Police. In 1924, following her father's death and her need for a better salary, she resigned and became a travelling organiser for the National Council for Combating Venereal Diseases, renamed the British Social Hygiene Council in 1925. In 1927 she joined Liverpool City Police as director of the city's ten policewomen.
In April 1930, Peto transferred to the Metropolitan Police as Staff Officer in charge of the Women's Section, with the attested rank of Superintendent. In April 1932 she took command of her own branch, A4 Branch (Women Police). She retired on 15 December 1946, having seen the expansion of the branch from 55 officers to over 200, about half the total number of female police officers in Britain. In May 1931 she became the first female member of the Police Council.