Petrie was born in Canada to Daniel Petrie Sr., a film director, and Dorothea, a producer, novelist, and actress. He attended Northfield Mount Hermon School and the University of Redlands, earning degrees in psychology and creative writing. Originally a literary agent, he followed in his father's footsteps and joined the film industry as a screenwriter. His debut screenplay, Beverly Hills Cop, was the result of numerous rewrites and several radically different iterations over the course of a decade. At one point, the film was a serious action film starring Sylvester Stallone, a project that Stallone later took with him and developed into Cobra. Despite the troubled production history, the film was a massive critical and financial success, grossing over $300 million worldwide from a $15 million budget and earning rave reviews from critics like Janet Maslin and Richard Schickel. In spite of much of the film's comedy having been improvised by the actors, Petrie's contributions earned him accolades in the form of Academy Award and Edgar Award nominations.
Petrie wrote a number of well-known and well-received films throughout the 1980s and 1990s, including the off-beat crime thriller The Big Easy starring Dennis Quaid and Ellen Barkin. He wrote two films for director Roger Spottiswoode, the 1988 thriller film Shoot to Kill and the Tom Hanks comedy Turner & Hooch, and produced a third; The 6th Day. Much of his work falls under the umbrella of crime fiction. He made his directorial debut with Toy Soldiers, a 1991 action film revolving around a group of teenagers fighting terrorists that have taken over their prep school. He served as the creator and executive producer of Combat Hospital, a television war drama series produced in his native Canada.
In addition to his creative pursuits, Petrie has been active in various entertainment industry organizations. He served as Vice President, and later President, of the Writers Guild of America, West, and currently sits on its Board of Trustees. He also served as a member of the Board of Trustees for the American Film Institute; a member of the Board of Governors for the Academy of Motion Picture Arts and Sciences; and as a member of the Board of Advisers of the Austin Film Festival and Screenwriting Conference. He is co-founder of Enderby Entertainment, an independent film finance and production company.

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