Derek and Peter has had a back and forth relationship that has gone from being familial to enemies. In their youth, Peter considered Derek to be his favorite nephew and frequently "looked out" for him, though his methods for doing so were questionable, such as spying.
Peter once said to Stiles that he was once close to Derek and was his best friend, however, considering Peter was retelling the past from his point of view and his version, it's unknown how true the statement was. It is at least revealed that at best, Peter had mentored Derek and at worst, Derek found him annoying and even once threatened to have him banned from school grounds though it's unknown if this was always the state of their relationship or if Derek was being serious.
Derek fell in love with a girl called Paige, whom Peter approved of and considered her to be a perfect mate for Derek but also played on his insecurities so that he could persuade his nephew into having Paige turned into one of them. Peter told Derek that there was a summit that was filled with more Alphas than he has seen before. Out of all of them, Peter had chosen Ennis, who had recently lost one of his Betas to hunters. Ennis agreed not only to fill the void with a new beta but to also "get in good" with Talia, who looked up to in the werewolf community.
Derek despite initially agreeing to it, lost his nerve and attempted to stop the attack but was too late. Paige had been bitten, and Peter was hiding nearby, visibly startled. Derek took Paige to the Nemeton where it is revealed that she is dying as her body was rejecting the bite. Peter arrives and becomes remorseful after seeing what was happening. Derek mercy kills Paige which results in his eyes changing color, Peter later takes the body from his arms and take it to the woods so that the death will seem to be caused by an animal attack.
Sometime after this incident, Derek struggles to control himself during a full moon. Peter attempts to teach him the traditional way but is unsuccessful, he then instead teaches Derek to use anger as an anchor and source for power, given him control and power at the same time.