The song was originally called "Cindy Lou", and was named for Buddy's niece, the daughter of his sister Pat Holley Kaiter. The title was later changed to "Peggy Sue" in reference to Crickets drummer Jerry Allison's girlfriend (and future wife), Peggy Sue Gerron, with whom he had recently had a temporary breakup.
Appropriately, Allison played a prominent role in the production of the song, playing paradiddles on the drums throughout the song, the drums' sound rhythmically fading in and out as a result of real-time engineering techniques by the producer, Norm Petty. The Rock and Roll Hall of Fame and Museum placed the song on its list of the "songs that shaped rock and roll".
The song went to #3 on the Billboard Top 100 chart in 1957.
The song is currently ranked as the 106th greatest song of all time, as well as the third best song of 1957, by Acclaimed Music.
Initially only Allison and Petty were listed as the song's authors. At Allison's insistence, Holly was credited as a co-writer after his death.
In 1999, National Public Radio (NPR) included "Peggy Sue" on the NPR 100, a list of "The 100 most important American musical works of the 20th century".
Holly wrote a sequel called "Peggy Sue Got Married" and recorded a demo version in his New York City apartment on December 5, 1958, accompanied only by himself on guitar. The tape was discovered after his death, and was "enhanced" for commercial release, by adding background vocals and an electric guitar track that drowned out Holly's own playing (and almost his voice as well). The rarely heard original version was released on a vinyl collection called "The Complete Buddy Holly", and was later used over the opening credits of the 1986 Kathleen Turner film Peggy Sue Got Married. After Holly's death The Crickets would also release their own cover single in 1960. They followed the original Peggy Sue arrangements with the only difference being David Box, a Buddy Holly soundalike, singing as the lead vocalist.
In 1978 the American rock band the Beach Boys recorded a cover of "Peggy Sue" for their M.I.U. Album. Originally recorded on April 15, 1976, for potential inclusion on the 15 Big Ones album, the Brian Wilson production was not selected for the final album. In 1978, Al Jardine revisited this recording, tweaking it to better fit with the production styling of the M.I.U. Album. Sung by Al Jardine, the song was also a hit for them, charting at number 59 in the United States when released as a single. The original Brian Wilson-produced version of the "Peggy Sue" was accidentally issued in place of the released Al Jardine version when the "M.I.U. Album" was briefly re-issued by Sony Music in 1991, but was soon discontinued. The wrong master of "Peggy Sue," also recorded by Brian Wilson and originally slated for 15 Big Ones, was also mistakenly used on the 1991 "M.I.U. Album" re-issue. That edition of the album is now considered a rare collectors item.
In an episode of Quantum Leap ("How the Tess was won"), young Buddy Holly, working as a Texas farm boy, invents the song as a homage to a piglet, calling it Piggy Sooey (a reference to hog calling). Sam Beckett suggests he calls it Peggy Sue instead and, after hearing this, he realizes that the teen, who he named "buddy", was in fact Buddy Holly.
In Almost Famous, the lead guitarist of the fictional band Stillwater, Russell Hammond, begins to sing this song as the plane he and his bandmates are flying in encounters severe turbulence, a reference to Buddy Holly's own death in a plane crash.
In 2004, the Norwegian band Trashcan Darlings released "Peggy Sue is Dead" on the "Tunes From The Trashcan EP".
In Quentin Tarantino's Pulp Fiction, the waiter Buddy Holly is calling Mia Wallace "Peggy Sue" when taking her order in Jack Rabbit Slim's, a 1950s-themed restaurant staffed by lookalikes of the decade's pop icons.
In the Wild Cards novels (another alternate history series), the song retains its original name, "Cindy Lou". In the fifth Wild Cards novel, Down and Dirty, it is explained that in this version of history, Jerry Allison's breakup with Peggy Sue Gerron was permanent, and thus the song's name was never changed.
The song is also referenced in a New Zealand children's songwriter named the Minstrel's song; "From Rock, to Roll to Rocket", in the line "Buddy Holly sang Peggy Sue".