Pedro Perea was born in Bernalillo, New Mexico to a Hispano Catholic family whose ancestors had been in the area since the colonial era. He went to Santa Fe to attend St. Michael's College, Santa Fe, then equivalent to a boys' seminary. He next studied at Georgetown College, Washington, D.C., soon after it was founded. He graduated from St. Louis College, St. Louis, Missouri, in 1871.
After returning to New Mexico, Perea owned and operated a ranch where he raised agricultural crops and large sheep herd.
He entered politics in his late 30s, being elected as a Republican member of the council of the New Mexico Territorial legislature in 1889, 1891, and 1895. He served as delegate to the Republican National Convention in 1896. He served as president of the First National Bank of Santa Fe in 1890–1894.
He engaged in banking and stock raising. Perea was appointed as Territorial insurance commissioner in early 1906, serving days until his death in Bernalillo, New Mexico, on January 11, 1906.