The game kicked off in glorious sunshine with Peterhead knowing a win would take them to within a point of leaders Edinburgh City who were in Irn-Bru Cup action.
The Spiders almost took an early lead, Kurtis Roberts taking the ball in his stride to fire a low effort past the left hand post in the second minute but two minutes later the home side were in front.
A long ball forward from the half way line by defender Jason Brown found new signing Shane Sutherland and he took the ball down inside the six yard box before slipping a shot home for a simple opener and a great start.
After eight minutes it was the Blue Toon on the attack again, a Jamie Stevenson corner from the right and a half volley from Derek Lyle well held by Jordan Hart.
In the 13th minute it could have been two, keeper Hart flapping at a Paddy Boyle left wing cross and he got off lightly as Jack Leitch sent a bicycle kick shot a fraction past the post.
Lyle headed a Ryan Dow corner wide in the 25th minute as Peterhead continued to dominate in their search for the second that would have given them some breathing space.
Queens made a great start to the second half and were level in the 49th with a scruffy goal.
It was a shocker from the home defence, falling to clear from a corner kick and after a couple of scrambled efforts on goal Scott Gibson got the final touch from close in.
Six minutes later though the Blue Toon were regained the lead.
A Stevenson corner from the right only cleared as far as substitute Willie Gibson and his well struck volley from 22 yards was buried low into the left corner.