The town grew in prosperity due to its position on frequently travelled routes, local sheep farming, and cottage industries including leather and cloth.There were weekly markets in the town square for sheep, horse and cattle trading, and two annual fairs, in June (on the feast of St Peter and St Paul) and November (on the feast of St Andrew).Across the site are sandy heath and acid heath areas, grassland and scrub which gives the area diverse zones for insects, reptiles, birds and small mammals.Petersfield Heath is at one end of "The Serpent Trail", a 65-mile (105 km) walk though heath and downland of Hampshire and West Sussex to Haslemere. The Petersfield Spring Festival over the May Bank Holiday weekend, the Petersfield Summer Festival over the August Bank Holiday weekend and the Petersfield Christmas Festival Market on the first Sunday in December.Next to the Red Lion public house is the small Charles Dickens garden.Petersfield has a small volunteer run community garden, 'The Good Life (Petersfield) Community Garden', situated on the edge of the town next to Sheet railway crossing; the garden is open to members (membership is free).The town is on the crossroads of well-used north–south (formerly the A3 road which now bypasses the town) and east–west routes (today the A272 road) and it grew as a coach stop on the Portsmouth to London route.Petersfield is twinned with Barentin in France, and Warendorf in Germany.
The town's market square has an 18th-century statue of King William III (of Orange) by Henry Cheere.
Petersfield is situated in the valley of the Western Rother, on the Lower Greensand at the northern edge of the South Downs.
The town lies at the western end of the Greensand Ridge, a sandstone ridge running through Hampshire, Surrey and Kent.
Close to the town and situated on the South Downs is Queen Elizabeth Country Park, which incorporates Butser Hill (270 metres), and has a variety of scenery including chalk hills, beech woodland and pine forest.
The Hangers Way footpath starts from the country park, goes to Buriton, through Petersfield and in to Alton.