Born as James Nicholas Pritzker to Robert Pritzker and Audrey (née Gilbert) Pritzker in Chicago, Illinois. She grew up as a member of the Pritzker family as the granddaughter of family patriarch A.N. Pritzker. She has two siblings, Linda Pritzker (b. 1953) and Karen Pritzker Vlock (b. 1958). Her parents divorced in 1979, and she has two half-siblings, Matthew Pritzker and Liesel Pritzker Simmons, from the remarriage of her Father, Robert, to Irene Dryburgh in 1980. (Her mother also remarried, to Albert B. Ratner in 1981).

Jennifer Pritzker's Father Robert, and his brothers Jay and Donald, built and Diversified a Chicago-based family Business, the Marmon Group, into a holding company of more than 60 diverse industrial corporations; they also created the Hyatt Hotel chain in 1957, and owned Braniff Airlines from 1983–1988. The family later began divesting of many of these assets. In 2006, the family sold Conwood, a smokeless tobacco company, for $3.5 billion to cigarette company Reynolds American Inc. In 2007, the family sold a 60% stake, and sold control of the Marmon Group to Berkshire Hathaway for $4.5 billion, a sale that it completed in 2013. In 2010, the family sold its majority stake in Transunion, the Chicago-based credit reporting company, to Chicago-based private-equity firm Madison Dearborn Partners for an undisclosed amount. As a member of the Robert's line of the Pritzker family, Jennifer Prizker has inherited and accumulated wealth that is estimated at US$1.7 billion.

Pritzker says one of her most memorable experiences in life were in Israel in October 1973 when she witnessed events of the Yom Kippur War. Pritzker enlisted in the U.S. Army on February 8, 1974, and served with the HQ Troop, and with the B Troop, 1st Squadron, 17th Cavalry Regiment, both in the 82nd Airborne Division based at Fort Bragg, North Carolina, rising to the rank of Sergeant. Pritzker's roles while enlisted included aviation repair parts clerk, rifleman, and fire team leader.

After completing military Service in February 1977, Pritzker enrolled at Loyola University of Chicago, majoring in history, and entered its Army Reserve Officers' Training Corps program. Pritzker graduated with a BA in History in May 1979, and received commission as an Army officer that same month.

Pritzker first served with the 1st Battalion, 503rd Infantry Regiment, 101st Airborne Division based at Fort Campbell, Kentucky, with duty assignments that included leading rifle and TOW platoons, and time in the Commandant Division, and the Anti-Armor School. Pritzker served as a staff officer with the VII Corps at Kelley Barracks, in Germany, from 1984–1985. Her active duty ended in 1985. After 16 years in the Army Reserves and Illinois Army National Guard, Pritzker retired from the United States Army as a lieutenant colonel, in 2001. After retiring, Pritzker was promoted to the honorary rank of Colonel in the Illinois Army National Guard.

Pritzker has a daughter from a first marriage, Tal Hava Pritzker, and two sons, Andrew (b. 1992) and william, from her marriage to Lisa I. Goren. As of 2014 she was divorced.

Pritzker earned airborne badges from Israel, Russia, Canada, the Netherlands, and Great Britain, as well as from Poland; according to Steven Mrozek, "Most memorable of these was a parachute jump at the North Pole with the Russians in 1993."

Pritzker created the Tawani Foundation in 1995, which aims "to enhance the awareness and understanding of the importance of the Citizen Soldier; to preserve unique sites of significance to American and military history; to foster health and wellness projects for improved quality of life; and to honor the Service of military personnel, past, present and Future." In 2003, the Tawani Foundation made a $1.35 million donation to the Palm Center at the University of California, Santa Barbara, to study the feasibility of transgender people serving in the military and in the ranks of police and fire departments. In 2013, the Foundation donated $25 million to Norwich University, in Northfield, Vermont, the school credited with developing and establishing the first Reserve Officers' Training Corps (ROTC) program in the country. So closely tied is this founder to the Foundation, that news reports of the Foundation's gifts refer to Jennifer Pritzker and the Foundation, interchangeably, as being the donor (e.g., in the Norwich gift). In 2016, through her Foundation, Pritzker gave a $2 million donation to create the world’s first endowed academic chair of transgender studies, at the University of Victoria in British Columbia; Aaron Devor was chosen as the inaugural chair.

Pritzker has founded or served with a number of Business and philanthropic organizations. In 1996, she incorporated Tawani Enterprises, where she served as President and CEO, a Business entity with current stated purpose as a "private wealth management company established to manage the personal wealth, philanthropic endeavors, and military interests of Colonel (IL) J.N. Pritzker." Interests of the company include significant Chicago real estate holdings. In 1995, Pritzker created the Tawani Foundation, and in 2003, she founded the Pritzker Military Library, both dedicated to the understanding and support of the "citizen soldier." In addition, Pritzker serves as Chairwoman of the Board of the Connecticut-based private equity firm Squadron Capital LLC, in which she has been identified a principle investor. Finally, Pritzker has served as Special Projects Director for the National Strategy Forum, as Chairman of the Board and co-owner of National Security Ltd. (1988–1995), and is active in number of further philanthropic enterprises.

On August 16, 2013, a statement was released to employees at Tawani Enterprises and the Pritzker Military Library indicating Pritzker to be the world's first openly transgender billionaire; the announcement read:

In 2016, Jennifer Pritzker was presented the Bonham Centre Award from The Mark S. Bonham Centre for Sexual Diversity Studies, University of Toronto, for her contributions to the advancement and education of issues around sexual identification.