Synthesis or humification of humic substances (HSs) is the second most widely occurring organic compound transformation process after photosynthesis. Peat decomposition process results in a production of HSs which have a high demand in agriculture, forestry, and gardening. Addition of KOH is a good option for environmental protection, as K+ belongs to the nitrogen, potassium and phosphorous (NKP) mineral complex. A homogenization process is necessary for peat to customize it for commerce; in the present study peat treatment technology was improved with the help of the cavitation effect. Cavitation effect was applied using a high-speed mixer-disperser (HSMD) developed at Riga Technical University. Mechanical cavitation causes relatively high energy shifts from mechanical movement of cavitation, which in turn causes efficient destruction of particles inside a suspension. Peat particle diameter at 50 % was measured before and after 1, 2, and 3 homogenization cycles. The aim of the present study was to find optimal conditions (KOH concentration, cavitation cycles, and reaction temperature) to produce potassium humate (K-HSs). Cavitation treatment reduced the peat particle diameter in the cumulative distribution (d50) from 267 µm to 129 µm; the peak in the particle distribution graph at 160–409 µm completely disappeared. Molecular mass significantly decreased, and this resulted in more efficient formation of fulvic acid caused by increased concentration of carbonyl and carboxyl groups as compared with the conventional homogenization method. The present study was done regarding sustainable and regenerative approach aspects.