The rare Russian treasure will be offered Monday at Sotheby's. Its presale estimate is $80,000 to $120,000.
The estate of the original owner, George Roberts, learned of its importance during an appraisal over the summer. Roberts purchased it in 1951 from a London dealer.
Experts believe that as few as 10 of the bejeweled miniatures were bestowed by Peter the Great on his subjects for their exceptional service to him. Until the latest discovery, only five were known to exist, three of them in museum collections. They predate the better known Order of St. Andrew award for civilian and military merit.
In 2001, one of the two in private hands sold for $132,500 at Christie's.
The 3½-inch-high oval portrait at the upcoming sale depicts Peter the Great in a blue cape and the sash of the Order of St. Andrew. The frame hangs from an imperial crown surrounded with diamonds. The reverse side is engraved with a triple-crowned, imperial double-headed eagle.
While believing it had some value because of the diamonds, Roberts' granddaughter, who lives in northern Arizona and did not want to be identified, had no idea it was an early 18th-century work of historic importance, Sotheby's said. After her grandfather bought it, it spent some time in Illinois where he lived and finally ended up in Arizona where the family kept it in a display cabinet.
It will be sold as part of Sotheby's Russian Art sale.
The miniature portrait is just one example of rare Russian treasures being discovered in unusual places in American collections.
Sotheby's expert Sonya Bekkerman said that last year it sold three works by Boris Grigoriev for $8.1 million that had been discovered tucked away in the Berkshire Museum of Art in Pittsfield, Mass. One of the works set an auction record for the artist.
In another case, Bekkerman said she received an e-mail from a man asking about the value of a painting he planned to offer on e-Bay for $5,000.
"When I opened the e-mail, it was absolutely divine. It was a work by Boris Grigoriev," said Bekkerman, who hastened to tell the man not to sell it that way.
"The next day, the gentleman shipped it to me in a box," she said. The man had Russian roots, and his grandfather had purchased the work, "Sailors at a Cafe, Boui Bouis."
Sotheby's sold it for $1.6 million in April 2005 at the time a record for the artist at auction.
Sotheby's inaugural New York sale of Russian fine and applied art was in 2005, a year after the art market in Russian works began to develop.