Stevie Crawford's men appeared to be cruising as Paul McManus gave them an early lead, before the home side then battered Jonathan Bateman's goal.
Jamie McCunnie carved open the Blue Toon defence to set up McManus and the striker made no mistake
by side-footing home.
Paul Sludden stung Bateman's palms a couple of times and Darren Gourlay also had a couple of chances to increase the scoring.
The second half started with more of the same and it was player-boss Stevie Crawford who was next to try his luck from distance.
Peterhead began to come back into the game with around 20 minutes to go and debutant Mark Ridgers, in the Fifers' net, had to pull off a wonder save from a Nicholas Clark free kick.
Paul McManus should have doubled his tally when he managed to get one-on-one with Bateman but he rounded the 'keeper too widely and Peterhead were able to clear.
And he was forced to rue that miss just a few minutes later when the visitors equalised in controversial fashion.
Dougie Cameron's free kick was headed on to the bar by Martin Bavidge, with the ball falling kindly for Bobby Mann just six yards from goal.
It looked as if Jon Smart had nodded his effort clear but the referee decided to take the advice of his far-side linesman and awarded the goal.
Smart was then involved again when he hauled down John Stewart inside the area.
The striker looked to be heading away from goal but ref Craig Charleston again awarded in Peterhead's favour, and sent off Smart before Stewart slammed home the winner.
The Fife defender could be in further trouble for gesturing at the away fans as he left the field.
East Fife – Ridgers, Gourlay, Ovenstone, McCunnie , Smart, Young (Linn 85), Sludden, Crawford (Staunton 87), McManus, Muir, Conway. Subs (not used) Cargill, Kerr, Brown.
Peterhead – Bateman, Donald, Smith, Mann, McDonald, Strachan, Sharp (Cameron 57), Stewart, Bavidge, Clark, Ross. Subs (not used) McVitie, Bruce, Young, Jarvie.
Referee – C. Charleston.
Attendance – 574.
Starcheck – Muir 3 points, McManus 2, Sludden 1.
Starcheck ratings – Stuart Baillie 10, Paul McManus 9, David Muir 9, Robert Campbell 6, Aaron Conway 5, Guy Kerr 5, Jonathan Smart 5, Mark Staunton 5, Bobby Linn 3, Paul Nugent 3, Lloyd Young 3, Jamie McCunnie 2, Scott Thomson 2, Stevie Crawford 1, Shaun Fagan 1, Darren Gourlay 1, Jordyn Sheerin 1, Paul Sludden 1.
