Peli began as a computer software programmer, and was one of the developers behind Photon Paint, a bitmap graphics program for the Amiga. His first film Paranormal Activity was inspired by Peli moving into his first house alone and without family nearby. Peli heard creaks and knocks in the night, which laid the groundwork for a film about a family running around with cameras trying to catch what was going on in the house.
After the success of Paranormal Activity, Peli worked with James Wan and Leigh Whannell to develop Insidious. Peli also produced and wrote the 2012 horror film Chernobyl Diaries, based on the Chernobyl disaster and on his story The Diary of Lawson Oxford. The film followed "a group of friends who, while vacationing in Europe, find themselves stranded in the abandoned city of Prypiat, Ukraine only to discover that they are not alone.