Preheat your oven to 350°F (175°C) and line a cupcake tin with liners.
In a mixing bowl, cream together the butter and sugar until light and fluffy.
Add the eggs one at a time, beating well after each addition. Stir in the vanilla extract.
In another bowl, whisk together the flour, baking powder, and salt. Gradually add the dry ingredients to the wet mixture, alternating with the milk. Mix until just combined.
In a small saucepan, combine the diced peaches, sugar, lemon juice, and cornstarch. Cook over medium heat until the mixture thickens and the peaches are soft.
Fill each cupcake liner about ⅔ full with batter. Spoon a small amount of the peach filling into the center of each cupcake.
Bake for 20-25 minutes, or until a toothpick inserted into the center comes out clean. Let cool completely before serving.