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Jacobsen was born and raised in Portland, Oregon. He graduated from Portland’s Lincoln High School.

Since turning fifty, Jacobsen has competed mainly on the Champions Tour, although he continued to play on the PGA Tour for several years. In his first year of eligibility for senior golf, he won the 2004 U.S. Senior Open, one of senior golf's major championships. The following year he added a second senior major title at the 2005 Senior Players Championship.

Jacobsen has won seven tournaments on the PGA Tour, the last coming at the 2003 Greater Hartford Open at the age of 49, making him one of the oldest players to win on the PGA Tour. That year he was voted the Tour's comeback player of the year.

Jacobsen owns Peter Jacobsen Sports, an event management company that has run several professional golf tournaments including the JELD-WEN Tradition, one of the majors on the Champions Tour, and the CVS Caremark Charity Classic, one of the PGA Tour's Challenge Series events. Until 2002 it also organized the Fred Meyer Challenge, a three-day charity event in Oregon.

Jacobsen appeared as himself alongside Kevin Costner in the 1996 movie Tin Cup, where he was the winner of the fictional U.S. Open.

Jacobsen played college golf at the University of Oregon. He turned professional in 1976 after winning the Oregon Open as an amateur. He is one of golf's most colorful personalities, which makes him one of the more popular players with fans.

Jacobsen qualified for the PGA Tour in his first attempt, finishing in 19th place at the 1976 qualifying tournament. He made steady progress during his first few seasons on the tour, before capturing his first title in 1980 at the Buick-Goodwrench Open. He won twice on the tour in 1984 and broke into the top-10 on the money list for the first time. Two more wins in 1995 catapulted him to a career best 7th place on the end of season money list. As a result of his performance during those two seasons, he was selected to play in two Ryder Cups, in 1985 and 1995.

Jacobsen married in December 1976 to Jan. The couple have three children: Amy, Kristen, and Mick.

Peter Erling Jacobsen (born March 4, 1954) is an American professional golfer and commentator on Golf Channel and NBC. He has played on the PGA Tour and the Champions Tour. He has won seven events on the PGA Tour and two events on the Champions Tour, both majors.