María Estela Martínez Cartas was born in La Rioja, Argentina, into a lower-middle-class family, daughter of María Josefa Cartas Olguín and Carmelo Martínez. She dropped out of school after the fifth grade. In the early 1950s she became a nightclub Dancer, adopting the name Isabel, the saint's name (the Spanish form of that of Saint Elizabeth of Portugal) that she had chosen as a confirmation name.

As Perón resumed an active role in Argentine politics from exile, Isabel acted as a go-between from Spain to South America. Having been deposed in a coup in 1955, Perón was forbidden from returning to Argentina, so his new wife was appointed to travel in his stead. The CGT leader José Alonso became one of her main advisers in Perón's dispute against Steelworkers' leader Augusto Vandor's Popular Union faction during mid-term elections in 1965; Alonso and Vandor were both later assassinated in as-yet unexplained circumstances.

She met her Future husband during his exile in Panama. Juan Perón, who was 35 years her senior, was attracted by her beauty and believed she could provide him with the female companionship he had been lacking since the death of his second wife Eva Perón (Evita) in 1952. Perón brought Isabel with him when he moved to Madrid, Spain, in 1960. Authorities in the strongly conservative Roman Catholic nation did not approve of Perón's cohabitation with a young woman to whom he was not married, so on 15 November 1961 the former President reluctantly married for a third time.

Isabel met José López Rega, who was a former policeman with an interest in occultism and fortune-telling, during a visit to Argentina in 1964. She was interested in occult matters (and as President reportedly employed astrological divination to determine national policy), so the two quickly became friends. Under pressure from Isabel, Perón appointed López as her personal secretary; López later founded the Argentine Anticommunist Alliance (Triple A), a death squad accused of perpetrating 1,500 crimes in the 1970s.

Atrocities were also being committed by left-wing extremists. Organized in 1968, the mysterious Roman Catholic-oriented anarchist Montoneros murdered former de facto President Pedro Aramburu, popular CGT union Secretary General José Ignacio Rucci, construction workers' union leader Rogelio Coria, former Interior Minister Arturo Mor Roig and U.S. Consul John Egan, among other murders and kidnappings. Throughout 1974, the rise of a new and nearly-as-violent Trotskyite group, the ERP, added to the cycle of violence. Having gained notoriety after the murder of FIAT executive Oberdan Sallustro, the ERP began the year with a violent assault on the Azul barracks. It murdered, among others, a Criminal court judge, Jorge Quiroga; the Writer Jordán Bruno Genta; and the publisher of La Plata's centrist El Día, David Kraiselburd. The kidnapping of Esso executive Victor Samuelson, freed for a ransom of US$12 million, ignited what would become a rash of such crimes. However, the government and paramilitaries used this environment to target and murder many legitimate opponents of the regime, as listed above.

López Rega's greatest influence upon Isabel Perón's presidency came through his recently formed Argentine Anticommunist Alliance (Triple A). A right-wing paramilitary force, between late 1973 and late 1974 the Triple A had already carried out nearly 300 murders, including that of Professor Silvio Frondizi (brother of former President Arturo Frondizi), Congressman Rodolfo Ortega Peña, Activist Father Carlos Mugica, Buenos Aires Province Assistant Police Chief Julio Troxler, former Córdoba Vice-Governor Atilio López and former Chilean Army head Carlos Prats. Other prominent public servants, such as UCR Senator Hipólito Solari Yrigoyen, and left-wing University of Buenos Aires President Rodolfo Puiggrós, narrowly survived Triple A attacks; Puiggrós was then removed from his post.

Limited largely to the murder of security forces and public figures during 1974, political violence escalated during 1975 to include soft targets in the population at large as Trotskyist ERP and fascist Triple A extremists began taking to midnight lightning strikes against each other and civilian targets such as banks, buses, yachts, parking lots, and restaurants. Over 700 lives were lost to political violence during Mrs. Perón's first 15 months in office, of which more than half were subversives and most of the remainder were security forces; by March 1976, civilians comprised fully half of the 1,358 deaths attributable to this conflict. The Montoneros, moreover, began a series of audacious attacks on military installations, including August dynamiting of a nearly finished Navy destroyer near the port of La Plata and the Operation Primicia, a terrorist attack on a military base in Formosa Province on 5 October. Anxious to placate the exasperated public, the military, hard-line labor Leaders (particularly the steelworkers' Lorenzo Miguel), and most other Peronists, on 6 October she and Lúder signed new measures giving blanket immunity for the Armed Forces that they may (in her words) "annihilate subversive elements throughout the country" - in effect a nationwide extension of the state of siege that had been imposed in Tucumán. The measure won her just enough support to return from "sick leave" and on 17 October (on Peronists' historically central Loyalty Day), Perón appeared at the balcony of the Casa Rosada, back at her post.

The UCR initiated impeachment proceedings against the President in February with the support of the "Rebel" Peronist faction in Congress. Near defeat though still active, the Montoneros detonated a bomb at Army headquarters on 15 March, killing one and injuring 29 people. The head of the CGE, Julio Broner, left Argentina with his family, altogether; CGT Secretary General Casildo Herreras followed suit, announcing from exile that he had "erased" himself. The leader of the opposition UCR Ricardo Balbín, while making efforts to form a multi-party congressional crisis committee, held a private meeting in February with Army Chief of Staff Videla and told him, "If you're planning to stage a coup, do so as soon as possible - expect no applause from us, but no obstacles either." The media were by then openly counting down the days to the expected coup d'état, and several newspapers published editorials calling for Perón's overthrow. Even as the joint chiefs professed loyalty to La Presidente, the Armed Forces High Command had already given final approval to a coup, code-named 'Operation Aries', when the President returned from her leave of absence in October 1975.

After working late into the evening of 23 March 1976, in the hope of averting a renewed Business lockout, Perón celebrated her executive assistant's birthday with staff. Alerted to suspicious military exercises, she boarded the presidential helicopter shortly after midnight. It did not fly her to the Quinta de Olivos presidential residence but to an Air Force base in nearby Jorge Newbery International Airport, where she was formally deposed and arrested.

Her health remained fragile, however, and a gallbladder affliction forced her to take a second, shorter leave of absence in November. Interior Minister Ángel Robledo's proposal that elections (scheduled for March 1977) should instead be held in November 1976 was approved by the President during this leave, bringing renewed hope that an increasingly rumored coup d'état could yet be averted.

The majority of Peronist officials in the national, provincial, and municipal governments were promptly arrested, and many "disappeared" permanently during the subsequent Dirty War, including numerous right-wing Peronists. Isabel Perón herself remained under house arrest in Villa La Angostura and other secluded locations for five years, and was eventually sent into exile in Spain in July 1981. She continued to serve as official head of her husband's Justicialist Party until her resignation in February 1985, nearly a decade after her fall from power. Though there were some who desired her return and wished for her return to power, she refused to stand for election to the presidency when elections were ultimately called in 1983. She lived in Madrid, maintained close links with Francisco Franco's family, and sometimes went to Marbella, a Spanish seaside city.

Following the restoration of democracy in Argentina, she was pardoned from charges of corruption during her presidency and returned in December 1983 as a guest of honor at President Raúl Alfonsín's inauguration, and in May 1984 to participate in policy talks arranged by Alfonsín and opposition Leaders. Still nominally head of Juan Perón's Justicialist Party, she played a constructive role in the talks, supporting cooperation between the restive CGT labor union (her party's political base) and Alfonsín. The talks concluded with a weak agreement, and she resigned from her post as titular head of the party. She returned to Argentina once more, in 1988, to resolve probate disputes concerning the Perón estate, then resumed residence in Spain under a very low profile.

A judge in Mendoza, Argentina in November 2006 demanded testimony from Isabel Perón, along with other Peronist ministers of her government, in a case involving forced disappearances during her presidency; on 12 January 2007, she was arrested in Madrid. She was charged by the Argentine authorities with the disappearance of Héctor Aldo Fagetti Gallego on 25 February 1976, and for crimes related to her issuance of the 6 October 1975 decree calling the Armed Forces to "annihilate subversive elements." The Nunca Mas ("Never Again") report released in 1984 by the National Commission on the Disappearance of Persons recorded 600 disappearances and 500 assassinations under the Peronist governments from 1973–76, and it is acknowledged that the Triple A alone murdered some 600 people.

The 2006 capture in Spain of Triple A death-squad overseer Rodolfo Almirón, who had also been in charge of López Rega's and Isabel Perón's personal security, shed further light on the extent of Triple A involvement in the early stages of the Dirty War. Isabel Perón's extradition to Argentina was refused by Spain on 28 March 2008. Spain's National Court ruled twice that the charges against her did not constitute crimes against humanity, adding that the statute of limitations on the charges expired after 20 years.

Anxiety over inflation, meanwhile, continued to dominate daily life. Monthly inflation did slow from the (then-record) 35% logged in July, but remained at 10–15% monthly between September and January 1976. A sudden fall in Business investment had by then sent the economy into a sharp recession, however. GDP growth had already slowed from a 6.8% rate in the fourth quarter of 1974 to 1.4% in the second quarter; following the Rodrigazo crisis, the economy shrank 4.4% by the first quarter of 1976, with fixed investment falling by one sixth and auto production by a third. The mid-year recession had significantly curbed the growth in imports; but because exports continued to fall, the trade deficit reached a record billion dollars in 1975, nearly depleting foreign exchange reserves. The government's 1975 budget had been derailed by the crisis and by earlier commitments to cancel its then still-modest foreign debt, something which even so cost Argentina US$2.5 billion that year, alone. The resulting budget deficits (over US$5 billion, in 1975) and a series of lockouts in the agricultural and commercial sectors began to reassert pressure on prices after November, leading to hoarding and shortages.

Another source of contention between her and the voters was the increasing impression that José López Rega, the Minister of Social Welfare, set the agenda for a broad swath of Perón's policies. Vetting nearly all domestic and foreign policy, he became a de facto prime minister and his public behaviour—which included bizarre actions such as silently mouthing her words as she spoke—began to cost the President much-needed support among the Argentine public. Known to have fascist sympathies, López Rega was also notably corrupt and used his position to secure Business partnerships with ODESSA network principal Otto Skorzeny, Muammar Gaddafi, and the Italian Fascist Licio Gelli (to whose P-2 lodge López Rega belonged).

The Supreme Court of Justice of Argentina unanimously dismissed on June 21, 2017 the petitions to interrogate Isabel Perón either as a witness or as a defendant.