No, Peter Griffin does not smoke. In several episodes he does
drugs, and he does smoke crack in one.
-- Actually in a 'breaking the fourth wall joke' in Back to
the Pilot …(this might be tough to explain) during a cutaway
Brian sets, Peter sets up another cutaway but as we the audience
would normally be seeing the cutaway, instead we see the 'family'
taking a break from filming.
Most of them are on their cell phones but Peter (the actor) lights
up a cigarette. Lois asks him does he think he has time to smoke,
Peter tells her it's an Al Harrington cutaway.
So the character Peter Griffin does not smoke (cigarettes at least)
but apparently the actor Peter does. (MORE)