Peltier was involved in a variety of causes championing Native American civil rights. In the early 1970s, he learned about the factional tensions at the Pine Ridge Indian Reservation in South Dakota between supporters of Richard Wilson, elected tribal chairman in 1972, and traditionalist members of the tribe. Wilson had created a private militia, known as the Guardians of the Oglala Nation (GOON), whose members were reputed to have attacked political opponents. A failed impeachment hearing of Wilson contributed to the AIM and Lakota armed takeover of Wounded Knee in February 1973. This resulted in a 71-day siege by federal forces, known as the Wounded Knee Incident.
Peltier's indictment and conviction have been the subject of much controversy. Peltier became eligible for parole in 1993.