Viktor was born in Narym, Tomsk Oblast, Siberia into a family of a Lieutenant General of the Imperial Russian Army. Anatoly Pepelyayev was his brother. Having graduated from the local university in 1909, Pepelyayev taught history at a girls' school in Biysk. He joined the Cadet Party and was elected to the State Duma in 1912.
On 15 January 1914 Pepelyayev delivered a controversial address, urging to provide education for the indigenous peoples of Siberia in their native languages, rather than in Russian. He was accused of Siberian separatism and had several clashes with the Russian nationalists. Following the February Revolution he was arrested by the Kronstadt sailors and spent a fortnight in a prison cell.
During the Russian Civil War Pepelyayev lent his support to the White movement and held a string of posts in the Siberian government of Aleksandr Kolchak, including those of Police Chief, Interior Minister, and Prime Minister. He was the only minister faithful to Kolchak until the very end. Both were executed by the Bolsheviks near Irkutsk in February 1920.