Preheat oven to 350°F (177°C).
Grease a 9-inch cake pan.
Wash, peel, and dice fresh peaches into small chunks. Pat lightly dry if very juicy.
In a medium bowl, whisk together flour, baking powder, baking soda, and salt.
In a large bowl, beat butter and sugar until light and fluffy.
Add eggs one at a time and mix well. Stir in vanilla extract.
Mix sour cream into the batter until smooth.
Gradually add dry ingredients into wet ingredients and mix until combined.
Gently fold diced peaches into the batter.
Pour batter evenly into prepared cake pan.
Bake for 40–45 minutes or until a toothpick inserted in the center comes out clean.
Allow cake to cool before serving.
Top with powdered sugar or whipped cream if desired.