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Peter participates in some medical experiments to pay off his debt made by a mentally disabled horse including one that sees him getting injected with the "gay gene". Peter winds up in a open gay relationship and leaves Lois and the rest of his family heartbroken though they realize the most important thing is that Peter is happy.

Family Guy
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Family Guy Season 7 Episode 8 Quotes

Lois: Peter, where have you been? You left for the market six hours ago! Did you get the beans?
Peter: Lois, I've got something better! You know how you've always wanted a real diamond engagement ring?
Lois: [gasps, touched] Oh my God!
Peter: That's right, I've bought a horse!

Peter: Okay, what's next?
Doctor: This is the Seth Rogen gene. It will give you the appearance of being funny, even though you haven't actually done anything funny.