As part of his argument, while admonishing Peter to live in accordance with the Gospel, Paul stated that he (Peter) while being a Judean, “lived” as a member of the nations and not (uniquely) as a Judean (Gal.2:14). Most people today wrongly conclude that Paul was describing Peter’s non-Jewish lifestyle, which is why Paul’s argument seems to make no sense. Yet the very basis of the conflict between the two apostles suggests otherwise. After all, the conflict was over fellowship with Gentiles who did not go through proselyte conversion.
These Gentiles worshiped Israel’s God in Christ, but did not completely obligate themselves to full Torah observance. They, therefore, remained members of the nations of the world. (Remember that the basic problem with Gentiles was not their genetic identity, but their non-Jewish lifestyle, which would have put them out of the possibility of fellowship with the rest of the Jewish people). This background, together with Peter’s apostolic commissioning to primarily minister to Judeans, renders our modern de-Judaized interpretation (of “you live as a Gentile”) nothing short of absurd.
Paul also told Peter that: “We who are Jews by birth and not Gentile ‘sinners’ know that a man is not justified by works of the Torah” (Gal. 2:15-16a). The Apostle Paul did not refer to Peter’s lifestyle, but rather to his experience in Christ! This was very much in line with what Peter witnessed himself when Israel’s God poured out His Spirit on Gentile God-fearers (Acts 10). That is without becoming proselyte converts (meaning without becoming fully committed to the entire Torah) the Gentile God-fearers became recipients of the Holy Spirit of Israel’s God!
In other words, “live as a Gentile” did not mean that Peter abandoned his Jewish lifestyle, but that he was now alive in Christ in exactly the same way as Gentiles were – by grace through faith, and not because of obedience to the Torah (Eph.2:1-22).
So, did Peter, and for that matter, Paul, “live” as Gentiles? Absolutely! They were made alive in Christ in the same way as Gentiles were! (Gal.2:15-16).