"This was something Marcus and I discussed," Reid told reporters of his decision. "I'm going to leave it at that."
Peters' suspension comes after he threw a referee's flag into the stands during Kansas City's 38-31 defeat to the New York Jets in Week 13. According to NFL Network's Ian Rapoport, Peters is also being punished for walking off the field while the game was still going on.
Reid told reporters after the game Peters headed for the sideline because he had thought the referees ejected him for the flag toss.
Peters' outburst encapsulates the Chiefs' overall slump following their 5-0 start. They've lost six of their last seven games to slip into a three-way tie with the Raiders and Los Angeles Chargers for the AFC West lead.
The fact Reid is willing to suspend Peters for what could be a critical game in the division race against Oakland shows how seriously he took Peters' actions.
Kansas City ranks 28th in pass defense (252.8 yards allowed per game). Now, it will be without its best cornerback ahead of a tough matchup against quarterback Derek Carr and wideout Michael Crabtree, who's returning from a one-game suspension.