He joined the Chinese Communist Party in 1923 as a founding member of the Shanxi Province CP. Arrested in 1929, he continued underground political activities while imprisoned. He was released from prison in 1935 and began organizing a resistance movement against the invading Japanese forces. Around the same time, he was appointed the Organization Department Director of the North Bureau of CPC. He is credited with substantial efforts towards the 1948 capture of Beijing by Communist forces in the Chinese Civil War.
Peng was a member of multiple Central Committees and the Secretariat of the . He also held the positions of First Secretary of the Beijing Municipal Committee, and Mayor of Beijing .
Peng fell out of favor with Mao Zedong in the when he attacked Mao's belief that all literature should support the state, but survived to be rehabilitated under Deng Xiaoping. He subsequently became Secretary of the Political and Legal Affairs Commission CPC Central Committee . As Chairman of the , he sought to increase the NPC's power. Peng retired from his leading political positions in 1988.
He is considered one of the Eight Immortals of Communist Party of China.