Peter Alan Waterman was born in Stoke Heath, Coventry, Warwickshire. He was educated at Whitley Abbey Comprehensive School until he left in 1962 to work for British Railways. He became a steam locomotive fireman based at Wolverhampton (Stafford Road) depot. In 2002 he said of his time working for British Railways, “I loved every minute of it. The squalor was unreal, but the camaraderie was phenomenal.” After closure of the depot in 1963, Waterman chose to follow a career in music, being inspired by The Beatles. To supplement his income as a DJ, he became a gravedigger and then an apprentice at General Electric Company, becoming a trade union official.

In 1979, Waterman set up Loose Ends with Peter Collins, the first coming under the name 14–18 with a single inspired by World War I, “Good-Bye-Ee,” and hits with artists like Musical Youth and Nik Kershaw. He then set up his own company PWL (Pete Waterman Limited) in 1984, quickly signing producers Matt Aitken and Mike Stock, who produced the song “Whatever I Do” for Hazell Dean. Stock Aitken Waterman became one of the most successful musical production teams of the 1980s.

Waterman’s main interest outside music is in railways, and he has been involved in several railway ventures. In 1988 he revived the name of the London and North Western Railway, which as a group encompassed various ventures:

In 2001, Pete was made an Honorary Doctor of Business Administration by Coventry University for his services to the pop industry.

In 2004 he was awarded an honorary doctorate in music by University College Chester.

In the New Year Honours List published 31 December 2004 he was given an OBE for his services to music. In December 2006, he became a patron of the newly formed charity, the City, Lambeth and Southwark Music Education Trust.

In 2007, Waterman became involved in a co-operative UK rail industry bid to create a national railway training scheme under the then Labour government, which after the Government seed funding was withdrawn from all such schemes, was halted in 2009. Waterman revealed in 2011 that he had since spent £900,000 of his own money on training apprentices at Crewe, and that outside Network Rail’s own scheme, only 37 apprentices had been taken into the rail industry in 2011. In January 2015, Waterman announced the sale of the bulk of his model railway collection, to fund the training of rail apprentices in restoring his steam locomotives 5224 and 5553, which in May 2015 were moved from Crewe to Peak Rail. In April 2015, the collection sold for £627,229 at the auction in Birmingham, West Midlands. In July 2015, in partnership with rail engineering firm OSL, Waterman launched the Railway Exchange Training Academy (RETA) at Crewe.

Whilst he has kept his promise not to appear as a talent show judge, on 12 October 2008, Waterman joined his fellow ex-Pop Idol judges Neil Fox and Nicki Chapman on Peter Kay’s spoof talent show Britain’s Got The Pop Factor… And Possibly A New Celebrity Jesus Christ Soapstar Superstar Strictly On Ice, a fully scripted fictional spoof on the talent show genre. The show parodied the emotional manipulation behind Cowell’s shows, with Waterman memorably interrupting a funeral to tell an ousted contestant that the loss of his gran (who had died of shock when learning her grandson had been dropped from the show) would provide the sob story he needed to get him on to the show.

Building a record collection through rare US imports, his DJ work began to take him across the UK, entertaining bigger crowds with a blend of rhythm and blues and soul music tunes he had sourced. Given a residency with the Mecca Leisure Group, he developed new initiatives including matinée discos for under 18s at Coventry’s Locarno club, which gave him a valuable insight into what music interested a younger audience. Waterman noticed that the younger dancers preferred records with high beats per minute and this influenced his later work. It was at the Locarno that Waterman first met Neville Staple, later to be a vocalist for The Specials – a band that Waterman would manage for a brief period. In early 2009, Waterman wrote the foreword to Staple’s biography, Original Rude Boy, which was published by Aurum Press in May 2009.

Waterman was one of the contestants in the 2009 series of the BBC programme Celebrity MasterChef, but was knocked out in the first round.

Waterman wrote and produced the UK entry for the 2010 Eurovision Song Contest. This song was performed by the final three acts on Eurovision, Your Country Needs You! on 12 March 2010, Josh Dubovie was chosen to represent the UK. The song came under much criticism and William Hill’s betting odds gave the song 125-1 chance that the song would win, the longest odds for a UK entry ever. In the end the song, “That’s Sounds Good To Me”, came last at the 2010 Eurovision Song Contest receiving only 10 points in total.

In 2016, Waterman was awarded Fellowship of the Royal Northern College of Music (FRNCM), making him the first pop musician to be given the award.

In October 2018, Waterman unveiled The Will Hay Appreciation Society’s memorial bench to Will Hay, Moore Marriott and Graham Moffatt in Cliddesden, Hampshire the filming location for Buggleskelly in the railway comedy film Oh, Mr Porter!.

In October 2019, Waterman appeared on The X Factor: Celebrity. Waterman was part of an all star audience during the auditions stage in Malibu at Simon Cowell’s house, providing commentary critique behind the main judges, alongside Randy Jackson, Howie Mandel and songwriter Diane Warren.