Holly wrote this about Peggy Sue Gerron, who was dating Holly's drummer with The Crickets, Jerry Allison. Holly was not involved with Peggy Sue, but liked the name for the song. Allison and Peggy Sue eventually got married, but divorced 11 years later.
At first, Holly was going to call this "Cindy Lou." Jerry Allison asked if the name could be changed as a favor to him. It probably wouldn't be heard outside of Lubbock, Texas anyway and it would really mean some brownie points for Jerry. Buddy had no problem with the name change.
This was the first hit credited to Holly without his backing band, The Crickets. The Crickets did play on this, but Holly's songs were released on one of 2 labels, Coral Records crediting him as a solo artist and Brunswick with The Crickets. Both labels were owned by Decca Records.
Allison had trouble keeping the right beat when they recorded this. The song had been written in Cha-Cha time. The engineer came on the mike and told Jerry: "If you don't get it right in the next take we're gonna change the name back to Cindy Lou." Jerry thought the guy might not be kidding so he asked for a few more minutes to "go through some exercises." He did just that. As he was going through the "new" warm-up, the beat to the song was changed from Cha-Cha to Jerry's new beat that was merely a part of his warm up routine for the high school band. Buddy began to change the guitar licks to fit the beat and the new rhythm developed right there on the spot.
"Peggy Sue" has been mentioned in they lyrics to several other songs, including "Splish, Splash" by Bobby Darin and "Barbara Ann" by The Regents and later by The Beach Boys.
Tommy Roe's song "Sheila" was heavily influenced by this.
Holly wrote a sequel to this called "Peggy Sue Got Married," which was released on a compilation album after he died. It inspired the 1986 movie Peggy Sue Got Married starring Kathleen Turner and Nicolas Cage. (thanks, Nora - richfield, MN)
On September 8, 2001, 48,000 people in Lubbock, Texas, tried to get into the Guinness Book of World Records by singing this at the Texas Tech-New Mexico football game. Horn-rimmed glasses like Holly used to wear were distributed to get them in the mood. The day before the game is when Holly would have turned 65.