The former world number one joined fellow Serb Ana Ivanovic on the sidelines after failing to deal with the consistency of her Chinese opponent, who now moves into an all-Asian third round clash against Japan's Ayumi Morita.
Jankovic has played nine consecutive Australian Opens but her best effort was reaching the semi-finals in 2008.
She battled hard against Peng but was undone by her high mistake rate, the Serb making 39 unforced errors to her opponent's 20, giving Peng her second consecutive victory over the world number eight.
Peng, who joins fellow countrywoman Li Na in the third round, has now equalled her best performance at a Grand Slam. She made the third round in Melbourne in 2009 and at Wimbledon in 2006 and 2008.
The 25-year-old missed much of last summer after suffering appendicitis and injury, but she has started 2011 in top form, reaching the semi-finals in Auckland and Hobart.