Peterson was convicted of first-degree murder in the 2001 death of Kathleen Peterson, who was found at the bottom of a bloody staircase in the couple's mansion. Peterson has maintained his wife died in an accidental fall after drinking alcohol and taking Valium.
Prosecutors are now appealing a 2011 ruling by Superior Court Judge Orlando Hudson that a State Bureau of Investigation analyst misled jurors about the strength of bloodstain evidence in his 2003 trial.
Judge Hudson granted Peterson a new trial, and released him from prison on a $300,000 bond. He has been under house arrest since December 2011.
Peterson wants a new trial, saying the testimony of Duane Deaver denied him a fair trial.
However, the state attorney general's office tried to convince the Court of Appeals Wednesday that a new trial would be a waste of taxpayer money. They argued that without Deaver's questionable testimony, a jury would still come to the same conclusion -- a guilty verdict.
Peterson, who was wearing his electronic ankle bracelet, also faced the sisters of his late wife in court Wednesday.
They said they are hoping the appeals court denies Peterson a new trial, but also said they are prepared to fight for their sister.
Depending on what the appeals court decides, the Durham County DA will have to consider giving Peterson a new trial, offering him a plea agreement or dismissing the case altogether.