Big: Substantial in size
Fat: Plump, well filled out
PeePee: Male reproductive organ (baby making machine part 1)
Put'em together and you get a sizable well filled out male reproductive organ. Damn if you needed the urban dic for this I suggest you finish elementary school.
Also used as an insult many times adding "head" to the end.
In an insult:
Hey what kind of big fat peepee head are you? Only a big fat peepee pushes other kids off the swings!