The deal gives both companies the opportunity to launch an array of cross-promotional marketing initiatives. It applies to all Tussauds' UK theme parks and attractions, although initially Peugeot will just have a presence at Alton Towers Theme Park, Thorpe Park and Chessington World of Adventures.
The car manufacturer will initially use the tie-up to promote the 807 MPV and the 307 SW, a family saloon.
The three parks will feature five-car displays showcasing the models.
Guides and maps to the parks will indicate where the displays are located.
Additionally, three Peugeot-branded World Rally Championship car simulators will allow visitors to find out what it's like to drive Peugeot's 206 GTI 180 rally car.
The summer edition of Peugeot's customer title Rapport will offer readers free tickets to Tussauds attractions.
Peugeot's UK dealerships are also participating in the tie-up. Consumers who visit a dealer forecourt will receive a £5 discount on tickets to the three Tussauds parks. Those who test-drive the 307 SW or 807 will receive a two-for-one ticket offer.
Peugeot is also in talks about sponsoring the Colossus ride at Thorpe Park. It is considering using the line 'The ride of your life' to highlight the deal, echoing the strapline on its ads and Five films sponsorship, 'The drive of your life'.
Peugeot manager for marketing partnerships Steve Harris described the deal as "an ideal medium in which to communicate our range of family vehicles to the right target market".
Peugeot's share of the UK market in 2002 was 8.15%, compared with 8.38% in 2001, according to the Society of Motor Manufacturers and Traders.