Highlighting a flurry of deals finished just before the trade deadline, Peavy was shipped out of San Diego on Friday while Martinez went from the rebuilding Cleveland Indians to a contender in Boston.
"What we're getting in Victor is a middle-of-the-order, switch-hitting batter who can catch, play first, DH," Red Sox manager Terry Francona said. "It's a very valuable piece."
Scott Rolen, Jarrod Washburn, Orlando Cabrera and Nick Johnson were other notable players on the move as teams stocked up for the stretch drive during a busy day that featured 11 trades.
Halladay remained with the fourth-place Blue Jays. After fielding offers for its coveted ace, Toronto decided to retain the 2003 AL Cy Young Award winner
- at least for now.
"We never really came close at all," general manager J.P. Ricciardi said. "We were never moved. We listened and we were never moved by a club that made us jump up and say,
'Wow this is something that will make us better in the future.'"
The biggest surprise of the day was probably Peavy. Sidelined with an injured ankle, he finally agreed to join the White Sox, who landed him with their second pitch of the season.
"A lot has changed since the first time this came around," Peavy explained. "In May, we had just won five or six games in a row and had creeped above .500, and Chicago wasn't really in the shape that they're in now."
Locked in a crowded race for the AL Central title, the White Sox sent four young pitchers to the Padres: Clayton Richard, Aaron Poreda, Dexter Carter and Adam Russell. The teams barely beat the 4 p.m. EDT cutoff to make deals without waivers.
"It came together very quickly, probably in the last 30-20 seconds," Chicago general manager Kenny Williams said. "We were really concerned that it wasn't going to happen."
In May, the Padres and White Sox reached a deal for Peavy, but the 2007 NL Cy Young Award winner turned it down. This time, he agreed to waive his no-trade clause and join the AL pennant race.
"He never said no, he just said 'not yet,'" Williams said.
The 28-year-old Peavy had spent his entire career with the Padres. He is 6-6 with a 3.97 ERA in 13 starts this season but has been on the disabled list since June 13 with a strained tendon in his right ankle. Williams said the White Sox don't expect Peavy to pitch until the end of August.
"I don't think it has set in yet with all that is going on. I'm sure I'll shed a few tears with the boys in the locker room because this is all I've known since I was a 17-year-old kid. It's been a lot of mixed emotions so far," Peavy said. "You're excited to play for a team where you know you're wanted."
The Red Sox wanted Martinez all along.
Looking for a big bat to boost the offense, they acquired the All-Star slugger for right-hander Justin Masterson and minor league pitchers Nick Hagadone and Bryan Price.
It was the Indians' second major trade in 72 hours - they dealt reigning Cy Young winner Cliff Lee to Philadelphia on Wednesday.
The 30-year-old Martinez has split his time at catcher and first base this season. He is batting .284 with 15 home runs and 67 RBIs.
Boston also sent recently acquired Adam LaRoche and approximately $1.5 million to Atlanta for Casey Kotchman in a swap of left-handed hitting first basemen.