She appeared in the BBC adaptation of Iris Murdoch's The Bell (1982).She also played the role of the bookish sister Mary Bennet in the BBC serial adaptation of Pride and Prejudice (1980).

Peake-Jones is best known for playing Raquel Turner, the longtime partner of the main character Derek "Del Boy" Trotter, in the television comedy Only Fools and Horses. She had a co-starring role in the 1999 TV series Births, Marriages, and Deaths. Her other television appearances include The Demon Headmaster, Midsomer Murders, Casualty, Holby City, The Bill, Up the Garden Path and So Haunt Me.

In March 2008 she appeared as a member of staff in the Channel 4 dramaPoppy Shakespeare. Set in psychiatric hospital, the production also starred Naomie Harris and Anna Maxwell Martin.

In both 2009 and 2011, Peake-Jones played Sue Bond in the BBC daytime soap opera, Doctors. In 2013 she appeared in the Doctor Who Christmas episode "The Time of the Doctor", playing a character called Marta.

Her partner was Douglas Hodge, who played her son Damien Trotter as an adult in the Only Fools and Horses episode "Heroes and Villains". They announced that they had split up in February 2013 after 27 years together. They have two children, a daughter, Mollie Rose, born in 1991, and a son, Charlie, born c. 2000.

Since 2014 she has appeared in Grantchester as Mrs Sylvia Maguire, the vicar's religious and cantankerous housekeeper