None of nearly 500 four- to 17-year-olds from the US and Europe could tolerate even a 10th of a peanut dose.
But after taking tiny daily doses for a year, two-thirds could tolerate at least two whole peanuts.
Emily Pratt, six, told the BBC's Today programme it had made a big difference. "I couldn't have a birthday cake at parties and now I can," she said.
She can now tolerate about seven peanuts, which means she can safely eat foods even if they may contain traces of peanut.
Emily's mum, Sophie, from north London, said: "It's been a constant stress.
"We were quite shocked how you could find traces of peanuts and nuts in all sorts of food, particularly foods that are childhood foods - cakes, biscuits, ice-creams - and that's what was stressful.
"We had to constantly study food labels to ensure peanuts were completely eliminated from Emily's diet.
"Her allergy was very severe, so even a small amount of peanut could lead to a very serious reaction.
The UK chief investigator for Palisade study, published in the New England Journal of Medicine, Prof George du Toit, a consultant at Evelina London Children's Hospital, said: "The results of this ground-breaking study are very promising and suggest that we will be able to protect children who are allergic to peanuts from having a severe reaction after accidental exposure.
"This is extremely good news as the number of children being diagnosed with peanut allergy in the UK has more than doubled over the past two decades.
"Peanut allergy is extremely difficult to manage for children and their families, as they have to follow a strict peanut-free diet.
"Families live in fear of accidental exposure as allergic reactions can be very severe and can even lead to death."
During the study, participants were randomly assigned into groups that either received capsules of peanut protein or a dummy powder. The amount given gradually increased to cause tolerance.