Peterman saw action in relief of Taylor in Buffalo's 47-10 loss to the New Orleans Saints in Week 10, and Week 11 will mark the first start of his career.
Taylor struggled against New Orleans, as he completed just nine of 18 passes for 56 yards and one interception. Peterman completed seven of his 10 attempts in the game for 79 yards and one touchdown, although it came against a prevent defense.
McDermott said the following about the change, according to ESPN.com's Mike Rodak: "Really, it's about becoming a better team. ... Every position is evaluated and that's the direction I decided to go."
"Obviously disappointed," Taylor told reporters after the move. "I don't agree with the decision, but the decision was made and I have to move forward."
"That's not up to me," Taylor said when asked if he would be the quarterback in 2018, the last season of his contract in Buffalo.
Last season at Pitt, Peterman set career highs with 2,855 yards and 27 touchdown passes. He also helped lead the Panthers past eventual national champion Clemson in an upset win.
In parts of three seasons as Buffalo's starting quarterback, Taylor is 19-18. This season, he has completed 64.2 percent of his passes for 1,684 yards, 10 touchdowns and three interceptions. He's rushed for 237 yards and two scores.
Taylor was named to the Pro Bowl at the conclusion of the 2015 season, and he ranked inside the top 10 in QBR in both the 2015 and 2016 campaigns. So far this season, Taylor is 19th in QBR, per ESPN.com.
Buffalo has lost two games in a row since a 5-2 start. Even so, it remains in the thick of the playoff hunt.