Agnetha Åse Fältskog (known as Anna in some countries) was born in Jönköping, Småland, Sweden on 5 April 1950. She was the first of two daughters of department store manager Knut Ingvar Fältskog (1922–1995) and his wife Birgit Margareta Johansson (1923–1994). Ingvar showed much interest in music and show Business, whereas Birgit was a calm and careful woman who devoted herself to her children and household.

Fältskog wrote her first song at the age of six, entitled "Två små troll" ("Two Little Trolls"). In 1958, she began taking piano lessons, and also sang in a local church choir. In early 1960, Fältskog formed a musical trio, the Cambers, with her friends Lena Johansson and Elisabeth Strub. They performed locally in minor venues and soon dissolved due to a lack of engagements. At age 15, Fältskog decided to leave school and pursue a career.

Fältskog's success continued throughout the late 1960s. She met German songwriter/producer Dieter Zimmerman, to whom she became engaged. Her albums thus reached the German charts, and Zimmerman promised her she would achieve great success in Germany. However, when she went there and met with record producers, the venture was not productive; Fältskog refused to meet the demands of the producers, describing their chosen material as "horrible". She soon ended her engagement to Zimmerman and returned to Sweden.

Between the years 1968 and 1980, Fältskog had a total of 18 entries on the Svensktoppen radio chart, starting with the debut single "Jag Var Så Kär" in January 1968 (peak position No. 1) and ending with "När Du Tar Mig I Din Famn" ("When You Take Me in Your Arms") from the compilation Tio år med Agnetha in January 1980 (peak position No. 1). These 18 entries, most of which were composed or co-written by Fältskog herself, spent a total of 139 weeks on the chart during this time, with the biggest hit being 1970's "Om tårar vore guld" (No. 1, 15 weeks). Fältskog also recorded the Swedish Christmas album Nu tändas tusen juleljus with daughter Linda Ulvaeus which peaked at No. 6 on the Swedish album chart in December 1981. Chartwise Fältskog was the most successful solo Artist of the four ABBA members, both before and during the band's international career.

In 1970, she released "Om tårar vore guld" ("If Tears Were Gold"). A Danish Composer claimed that she used 22 bars from his composition "Tema" ("Theme"), even though it was written in the 1950s and had never been recorded. The case dragged on until 1977, when a settlement was reached and Fältskog paid the Danish musician SEK5,000.

Fältskog met Björn Ulvaeus, a member of the Hootenanny Singers, for the first time in 1968, and then again in 1969. Her relationship with Ulvaeus, as well as her friendship with Anni-Frid Lyngstad and Benny Andersson, with whom Ulvaeus had already written songs, eventually led to the formation of ABBA. Fältskog and Ulvaeus married on 6 July 1971 in the village of Verum, with Andersson playing the organ at their wedding. Their first child, Linda Elin Ulvaeus, was born on 23 February 1973, and their son Peter Christian Ulvaeus on 4 December 1977. After seven years of marriage, the couple decided to separate in late 1978, and filed for divorce in January 1979. The divorce was finalised in July 1980. Both Fältskog and Ulvaeus agreed not to let their failed marriage interfere with their responsibilities with ABBA. The failure of their marriage inspired Ulvaeus to write "The Winner Takes It All".

In 1972, Fältskog portrayed Mary Magdalene in the Swedish production of the international hit musical Jesus Christ Superstar.

In 1975, during the same period as her bandmate Anni-Frid Lyngstad recorded her Swedish number one album Frida ensam, Fältskog recorded and produced her solo album Elva kvinnor i ett hus. These albums were both recorded between sessions and promotion for the ABBA albums Waterloo and ABBA. Fältskog's album spent 53 weeks on the Swedish album chart (longer than any of ABBA's albums), but failed to reach the Top 10, peaking at No.11. It contained three further Svensktoppen entries for Fältskog: her Swedish language version of ABBA's "SOS" (also No. 4 on the single sales chart); "Tack För En Underbar Vanlig Dag"; and "Doktorn!". With the exception of "SOS", all the songs had lyrics by Bosse Carlgren and music by Fältskog herself. The creation of the album had been underway since 1972, when Fältskog started writing the songs, but it was delayed because of the work with ABBA and her pregnancy. In 1974, Fältskog and Carlgren had agreed on a concept for the album; it should consist of 12 songs, each sung by 12 different female characters living in the same apartment building, however in the end only 11 songs were featured on the album, and the concept wasn't fully developed.

Fältskog's split from Ulvaeus in 1979 greatly affected her; she needed therapy. Her second marriage in 1990 to Tomas Sonnenfeld was held secretive, and only became public knowledge when they divorced three years later. She also held the secret of her mother, Birgit's suicide in 1994 and her father's death in 1995.

A second single release from the album, "When You Walk in the Room", peaked at No.11 in Sweden and entered the UK Top 40 at No. 34 (which was still higher than any of her UK singles in the 1980s). "Sometimes When I'm Dreaming", originally recorded by Art Garfunkel, failed to be released as the third single.

Fältskog participated in Melodifestivalen again, albeit only as a Composer. In 1981, she wrote the ballad "Men Natten Är Vår" ("But the Night Is Ours") with lyrics by Ingela Forsman, but instead of performing the song in the contest herself, she chose new talent Kicki Moberg. The song placed 9th out of 10. The single, which Fältskog produced in the Polar Studios with the same Musicians as on contemporary ABBA recordings, was backed with the Swedish version of "I'm Still Alive", entitled "Här Är Mitt Liv" ("Here Is My Life"), a song which she herself had performed in its English version (lyrics by ex-husband Björn Ulvaeus) during ABBA's 1979 world tour. Moberg's recording of the song remains the only version to have been officially released to date.

Although no official announcement was made, ABBA effectively disbanded in late 1982 to early 1983. At the end of 1982 Fältskog duetted with Swedish singer (and former ABBA backing vocalist) Tomas Ledin on a song called "Never Again", which became a Top Five hit in Sweden, Norway, Belgium, and South America. The song was also released in a Spanish-language version, entitled "Ya Nunca Más". In the summer of the same year, Fältskog had a leading role in the Swedish movie Raskenstam.

In May 1983, Fältskog released her first post-ABBA solo album, Wrap Your Arms Around Me. The album became a moderate hit in North America and Australia, but reached the higher regions of the charts across Europe, including No. 1 in Sweden, Norway, Finland, Belgium, and Denmark (where it became the biggest-selling album of the year), and No. 18 in the UK. The album achieved sales of 1.5 million copies in the first year. Two singles from the album became hits in continental Europe: "The Heat Is On" became a No. 1 hit in Sweden, Denmark, Norway, Finland, Belgium, and the Netherlands. The song peaked at No. 35 in the UK (and was Fältskog's highest charting and only UK Top 40 hit until 2004). The album's title track reached No. 1 in Belgium and peaked at No. 4 in the Netherlands. In North America, the album track "Can't Shake Loose" was released as the lead-off single, reaching No. 29 on the Billboard Hot 100 chart, and No. 23 on the RPM Top 50 singles chart in Canada.

Fältskog's next studio album, Eyes of a Woman, produced by Eric Stewart of 10cc, was released in March 1985. "She is quite content to grace the works of various other lesser mortals with her immaculate, sugar-sweet voice," wrote Barry McIlheney in Melody Maker. The album sold well in parts of Europe, peaking at No. 2 in Sweden and reaching the Top 20 in Norway and Belgium, but scraped into the UK Top 40 just for one week. The album sold up to 800,000 copies. The self-penned lead single "I Won't Let You Go" achieved moderate success in Europe, reaching No. 6 in Sweden, No. 18 in the Netherlands and No. 24 in West Germany.

In 1986, Fältskog recorded another duet, "The Way You Are", with Swedish singer Ola Håkansson, which became another No. 1 hit in Sweden and Norway.

In the summer of 1987, Fältskog travelled to Malibu, California, to record her fourth post-ABBA solo album, I Stand Alone, produced by Peter Cetera (formerly of the band Chicago) and Bruce Gaitsch, who had collaborated on Madonna's La Isla Bonita. Released in November of that year, I Stand Alone was a minor hit in Europe, except in Sweden where it spent eight weeks at No. 1 and became the best-selling album of 1988. More than 300,000 copies were sold throughout Scandinavia. According to Hans Englund, the Swedish head of WEA, more than 800,000 copies were sold globally. However, chart-wise outside of Scandinavia, the results were less impressive.

The single "I Wasn't the One (Who Said Goodbye)", on which Fältskog duetted with Peter Cetera, was released primarily in North America, and became her second solo single to chart on the Billboard Hot 100, peaking at No. 93. It was also a Top 20 Billboard Adult Contemporary hit. The track (along with "The Last Time" as "La Ultima Véz") was also recorded in Spanish for the Latin American market as "Yo No Fui Quién Dijo Adiós". Fältskog refused to promote the album in major TV shows in West Germany, but she made a promotional visit to London in February 1988, appearing on the Terry Wogan Show.

In 1990, Fältskog married Swedish surgeon Tomas Sonnenfeld, but the couple divorced in 1993.

In 1994, Fältskog's mother committed suicide by jumping from her Jönköping apartment balcony. Fältskog's resulting depression worsened a year later when her father died.

In 1996, her autobiography Som jag är was published in Swedish (and in English the following year titled As I Am), followed by several compilation CDs of her Swedish and English recordings, including one called My Love, My Life for which Fältskog picked out the music herself. Fans welcomed the autobiography. The book was updated in 1998 and released worldwide via Virgin Publishing, selling over 50,000 copies.

In 1997, Fältskog started a relationship with a Dutch forklift driver, Gert van der Graaf. After Fältskog decided to terminate the relationship in 1999, he stalked her further at her mansion, resulting in a court issuing Van der Graaf with a restraining order and deporting him to the Netherlands in 2000. Returning close to her home in 2003, he was arrested and then banned from entering Sweden. In 2005, the ban order from Sweden ran out, and within months van der Graaf was again sighted near Fältskog's estate in Ekerö.

In 2004, Fältskog was nominated for Best Nordic Artist at the Nordic Music Awards, and at Christmas of that year she gave an extensive interview (her first for many years) which was filmed by Swedish TV. Around the same time, Sony Music released a lavishly produced 6-CD boxed set comprising Fältskog's Swedish solo career (mostly before ABBA), with five original solo albums: 1968, 1969, 1970, 1971, and her 1975 album recorded and released during her time with ABBA – plus an additional compilation disc with bonus tracks.

In 2005, Fältskog appeared with her former bandmates at the opening of the Mamma Mia! musical in Stockholm, and together with ex-husband Björn, also attended the final show in January 2007.

On 4 July 2008, Fältskog joined her former bandmates at the Swedish premiere of the film version of Mamma Mia!, held at the Rival Theatre (owned by Andersson) in Mariatorget, Stockholm. Fältskog arrived with Lyngstad and movie star Meryl Streep, the three dancing in front of thousands of fans before joining the film's other stars and Andersson and Ulvaeus on the hotel balcony for the first photograph of all four ABBA members together in 22 years.

In January 2009, Fältskog appeared onstage with Lyngstad at the Swedish Rockbjörnen Awards to receive a lifetime honorary award for ABBA, and even giving a short, lightweight interview.

In October 2010, Fältskog attended the opening of the Mamma Mia! musical in Denmark, with former husband, Björn Ulvaeus.

On 18 November 2013 in order to promote the song, a video for "I Should've Followed You Home" was shot the same day as the release of the single itself. Although the single was released in most countries in November 2013, its release in the United Kingdom was held over. She also won Best Female Album – 6th Annual Scandipop 2014, and was nominated for the German 2014 ECHO award in the Artist Rock/Pop International category.

In April 2016, a new biography of Fältskog, by Daniel Ward, Agnetha Fältskog - The Girl With The Golden Hair, was published in the UK.