The visitors created the better chances throughout the game, and the first shot on goal came in the 12 minute when the outstanding Allan Jenkins shot wide of the left-hand post.
Gretna's John O'Neil went close on two occasions before scoring the opening goal after 15 minutes. Gavin Skelton played the ball in from the left wing to Jenkins, and he crossed for O'Neil to glance his header into the net at the near post.
Peterhead equalised with a bizarre goal 10 minutes before half-time. Gretna keeper Alan Main threw the ball out and it hit one of his own players before breaking to Kevin Nicol, who lofted the ball over the stranded Main and into the net from 20 yards.
Peterhead rarely created a scoring chance apart from their goal in the first half, but they nearly went in front five minutes after the restart, Main blocking a fierce shot from Graeme Sharp.
Gretna continued to dominate, and after O'Neil shot wide from the edge of the penalty area, their pressure paid off when they scored again after 74 minutes.
Jenkins crossed from the left, James Grady head flicked on to Ryan McGuffie and he shot high into the net from six yards.
Steven Tosh went close for Gretna with a well-struck shot from 25 yards which went past the right-hand post before it was game over with five minutes remaining.
Jenkins broke forward and flipped the ball to Skelton on the left side of the penalty area, and he shot low into the far corner of the net.