Peterel was laid down (as Yard number 745) on 29 July 1898 by the Jarrow shipbuilder Palmers Shipbuilding and Iron Company Limited. Construction began 'on spec' (i.e. as a private venture by the builder without a specific order), but the part-built ship was included in a January 1899 tender by Palmers to supply three destroyers to the Royal Navy under a supplement to the 1899–1900 shipbuilding programme. The ship was launched on 30 March 1899 and Palmers' tender accepted in April 1899, the contract price being £47149 per ship.
Peterel closely resembled, built by Palmers under the previous year's shipbuilding programme, and like Spiteful had four funnels. She was 219inchesft6inchesin (ftin) long overall, with a beam of 20inchesft9inchesin (ftin) and a draught of 8inchesft11inchesin (ftin). Displacement was 370LT light and 420LT full load. Four Reed boilers fed steam at to triple expansion steam engines rated at 6200ihp and driving two propeller shafts, giving a speed of . 91 tons of coal carried.
Armament was a single QF 12 pounder 12 cwt (3inches) gun on a platform on the ship's conning tower (in practice the platform was also used as the ship's bridge), backed up by five 6-pounder guns, and two 18 inch (450 mm) torpedo tubes.
Peterel was delivered at Portsmouth in February 1900 for completion and armament[1] and was completed in July that year. On 16 March 1901, Peterel, as part of the Portsmouth Instructional Flotilla, was due to escort the liner, carrying the Duke and Duchess of Cornwall and York (the future King George V and Queen Mary), out of Portsmouth harbour as the Prince and Princess started a tour of the British Empire.[2] Peterel took part in the 1901 Naval Manoeuvres. On 13 September 1904, Peterel was commissioned for comparative trials against sister-ship, which had been modified to use oil fuel.[3]
In 1910 Peterel was a member of the 4th Destroyer Flotilla based at Portsmouth, remaining part of the flotilla in 1912.[4] On 30 August 1912 the Admiralty directed all destroyers were to be grouped into classes designated by letters based on contract speed and appearance. As a four-funneled 30-knotter destroyer, Peterel was assigned to the B Class.
In 1912, older destroyers were organised into Patrol Flotillas, with Peterel being part of the 6th Flotilla, based at Portsmouth, in March 1913.[5]