Her father, Rupert Potter, although educated as a barrister, spent his days at Gentlemen's clubs and rarely practised. Her mother spent her time visiting or receiving visitors. Both parents lived on incomes (inheritances) from their parents.

Beatrix Potter was born in Kensington, London in 1866. Educated at home by a succession of governesses, she had little opportunity to mix with other children or her brother Betram who was sent to boarding school, leaving Beatrix alone with her pet animals. She had frogs and newts, and even a pet bat. Among her pets were two rabbits. Her first rabbit was Benjamin, whom she described as "an impudent, cheeky little thing", while her second was Peter, whom she took everywhere with her, even on trains, on a little lead. Potter would watch these animals for hours on end, sketching them. Gradually the sketches became better and better, developing her talents from an early age.

Beatrix Potter's illustration of her anthropomorphic rabbits — in this case the married cousins, Benjamin and Flopsy Bunny (with Peter Rabbit in the background), from The Tale of the Flopsy Bunnies

Every summer, Rupert Potter would rent a country house; firstly Dalguise House in Perthshire, Scotland for the eleven summers of 1871-1881, then later on in the English Lake District. In 1882 the family met the local vicar, Canon Rawnsley, who was deeply worried about the effects of industry and tourism on the Lake District. He would later found the National Trust in 1895, to help protect the countryside. Potter had immediately fallen in love with the rugged mountains and dark lakes, and through Rawnsley, learnt of the importance of trying to conserve the region, something that was to stay with her for the rest of her life.

When she came of age, her parents appointed her their housekeeper and discouraged any intellectual development, instead requiring her to supervise the household. However, in contrast to her parents wishes but in reflection of the period, from the age of fifteen until she was past thirty, she recorded her everyday life in journals - using her own secret code-writing.

An uncle attempted to introduce her as a student at the Royal Botanical Gardens at Kew, but she was rejected because she was female. Potter was later one of the first to suggest that lichens were a symbiotic relationship between fungi and algae, but her one attempt to publish was thwarted. Her uncle had to read her paper at the scientific society because they did not admit females. At the time the only way to record microscopic images was by painting them; her pictures of fungi were widely admired.

The basis of her many projects and stories were the small animals that she smuggled into the house or observed during family holidays in Scotland and the Lake District. She was encouraged to publish her story, The Tale of Peter Rabbit, but she struggled to find a publisher until it was accepted when she was 36 in 1902, by Frederick Warne & Company. The small book and her following works were extremely well received and she gained an independent income from the sales. She also became secretly engaged to the publisher, Norman Warne, but her parents were set against her marrying anyone who worked for a living. He died before the wedding, causing a breach between Beatrix and her parents.

Potter eventually wrote 23 books. These were published in a small format, easy for a child to hold and read. Her writing efforts abated around 1920 due to poor eyesight, though her last major work, The Tale of Little Pig Robinson, was published in 1930.

After the death of Warne, Potter purchased Hill Top Farm in the village of Sawrey, Lancashire, in the Lake District. She loved the landscape, and would visit the farm as often as she could, discussing the set-up with farm manager John Cannon. With the steady stream of royalties from her books, she began to buy pieces of land under the guidance of local solicitor William Heelis. In 1913 at age 47, Potter married Heelis and moved to Hill Top farm permanently from London - the couple had no children.

Some of her best loved works show the farm house and the village, and the farm was constantly alive with dogs, cats and even a pet hedgehog, naturally enough named "Mrs Tiggywinkle". On moving to the Lake District, Potter become engrossed in breeding and showing Herdwick sheep. She became a respected farmer, a judge at local agricultural shows, and President of the Herdwick Sheep Breeders’ Association. When her parents died, she used the funds to buy more farms and tracks of land. After some years Potter and Heelis later moved down into the village of Sawrey, and into Castle Cottage - where the local children knew her for her grumpy demeanour, and called her "Auld Mother Heelis".

She died at Castle Cottage in Sawrey, on 22 December 1943. Cremated, her ashes were scattered in the countryside near Sawrey.