Kate Sheppard was born Catherine Wilson Malcolm in Liverpool, England, to Scottish parents Jemima Crawford Souter and Andrew Wilson Malcolm. Her Father, born in Scotland in 1819, was a Lawyer and banker; he married Souter in the Inner Hebrides on 14 July 1842. Catherine was the second or third of five children. She was named after her paternal grandmother, but preferred to spell her name "Katherine" or to abbreviate it to "Kate". Details of the children's education are unknown, though Kate's later writings demonstrate an extensive knowledge of science and law, indicating a strong education. She was known for her broad knowledge and intellectual ability. Her father's love of music ensured that the family had good musical training.

The family often moved around Scotland, as their Father was required to travel professionally in order to settle disputes. He died in 1862, but left his widow with sufficient means to provide for the family. After her father's death, Kate lived with her uncle, a minister of the Free Church of Scotland at Nairn; he, more than anyone else, instilled in her the values of Christian socialism. During this time, the rest of the family stayed with relatives in Dublin, where Kate later joined them.

George Beath, the partner of Kate's sister Marie, emigrated to Melbourne in 1863, and later moved to Christchurch. After Marie joined him there, they were married in 1867, and their first child was born the following year. Marie's accounts of Christchurch motivated Jemima to move her family to New Zealand, as she was seeking better prospects for her sons' employment and wanted to see her granddaughter. They sailed on the Matoaka from Gravesend on 12 November 1868, arriving in Lyttelton Harbour on 8 February 1869.

Kate married Walter Allen Sheppard, a shopkeeper, at her mother's house on 21 July 1871. Walter had been elected to the Christchurch City Council in 1868, and may have impressed Kate with his knowledge of local matters. They lived on Madras Street, not far from her mother's home, and within walking distance of the city centre. The Trinity Congregational Church raised funds for a new building from 1872 to 1874, and Kate was most likely involved in this. She formed a friendship with Alfred Saunders, a Politician and prominent temperance Activist who may have influenced her ideas on women's suffrage. In 1877–78, Sheppard and her husband spent a year in England, then returned to Christchurch. Their only child, Douglas, was born on 8 December 1880.

In 1879 universal male suffrage had been granted to all men over the age of 21 whether they owned property or not, however women were still excluded as electors. A limited number of voting rights were extended to female voters in the 1870s. Female ratepayers were able to vote in local body elections in 1873, and in 1877 women "householders" were given the right to vote in and stand for education boards.

Sheppard was an active member of various religious organisations. She taught Sunday school, and in 1884 was elected secretary of the newly formed Trinity Ladies' Association, a body established to visit with parishioners who did not regularly attend church services. The association also helped with fund-raising and did jobs for the church such as providing morning tea. Sheppard wrote reports on the work of the Association, tried to recruit new members, and worked to retain existing ones. The following year she joined the Riccarton Choral Society. Her solo in a May 1886 concert was praised in the Lyttelton Times. She also served on the management committee of the YWCA.

Sheppard became involved in establishing a Christchurch branch of the WCTU prior to the formation of a national organisation. Her initial involvement was promoting petitions to Parliament to prevent women being employed as barmaids, and to outlaw the sale of alcohol to children. This marked the beginning of her collaborations with Alfred Saunders, who advised her on her negotiations with politicians and who wrote to the Premier, Sir Robert Stout, seeking to further her campaign. The petitions against barmaids (including some from other parts of the country) were rejected by the Petitions Committee of Parliament later in 1885 and Sheppard decided that as petitions could be ineffective, women's franchise was necessary.

The New Zealand Women's Christian Temperance Union was formed at a conference in Wellington in February 1886. Sheppard did not attend that conference, but at the second national convention in Christchurch a year later, she arrived ready to present a paper on women's suffrage, although there was no opportunity for her to do so. She was first appointed Superintendent for Relative Statistics, owing to her interest in economics. In 1887—when local Franchise departments were established within the WCTU—she was appointed National Superintendent for the Franchise and Legislation.

The WCTU sent a deputation to Member of Parliament and former Premier Sir Julius Vogel asking him to introduce a suffrage bill to parliament. He did so in 1887, with the Female Suffrage Bill, and Sheppard campaigned for its support. In its third reading, the part dealing with women's suffrage was defeated by one vote, and the bill was withdrawn. During the general election campaign later that year Sheppard encouraged WCTU members to ask parliamentary candidates questions about suffrage, but few women did so.

The Fendalton house at 83 Clyde Road, where the Sheppards lived from 1888 to 1902 and now known as the Kate Sheppard House, is registered by Heritage New Zealand as a Category I heritage building, in view of the many events relevant to women's suffrage which happened there. It was here that Sheppard pasted together the three main petitions onto sheets of wallpaper.

In 1890, Sheppard was one of the founders of the Christian Ethical Society, a discussion group for both men and women, not limited to the members of a single church. In their first few meetings the topics included selfishness, conjugal relations, and dress reform. The Society gave Sheppard more confidence defending her ideas against people from diverse backgrounds. During 1891, Sheppard began editing a page in the Prohibitionist on behalf of the WCTU. The Prohibitionist was a fortnightly temperance paper with a circulation around New Zealand of over 20,000. Sheppard used the pseudonym 'Penelope' in this paper.

The Canterbury Women's Institute was formed in September 1892, with Sheppard playing a leading role and taking charge of the economics department. The institute was open to both men and women and worked to reduce inequalities between them. Sheppard believed that enfranchisement was the first step towards achieving other reforms, such as reforming unfair laws on marriage, parenthood, and property, and towards eliminating the uneven treatment of the sexes in morality.

In December 1893, Sheppard was elected President of the Christchurch branch of the WCTU. She chaired the first two meetings in 1894, before travelling to England with her husband and son. She was in great demand in England as a speaker to women's groups about the struggle for women's suffrage in New Zealand. In mid-1895, the WCTU launched a monthly journal, The White Ribbon, with Sheppard as the Editor contributing to it from overseas. While in England Sheppard had health problems, requiring an operation, possibly a hysterectomy. The family returned to New Zealand at the beginning of 1896. Later that year, Sheppard was reappointed Editor of The White Ribbon.

The National Council of Women of New Zealand was established in April 1896 by the Canterbury Women's Institute and ten other women's groups from throughout New Zealand, and Sheppard was elected President at its founding convention. The Council promoted the right of women to stand for Parliament, equal pay and equal opportunities for women, the removal of legal disabilities affecting women, and economic independence for married women.

By 1902, Sheppard's marriage appears to have been under strain, and possibly had been for several years. Her husband sold their house and moved to England with their son, who wished to study in London. Sheppard bought new furnishings and appeared to be planning for a permanent residence. However, suffering from stress, in 1903 she stepped down from her positions at the National Council of Women. She sold her newly acquired furnishings, and moved to England without any fixed date to return. On the way she briefly stopped in Canada and the United States where she met the American suffragist Carrie Chapman Catt. In London, she was active in promoting women's suffrage there, but her health deteriorated further, forcing her to stop this work.

In November 1904, Sheppard returned to New Zealand with her husband, but he went back to England in March the following year. Sheppard moved into the house of her old friend william Sidney Lovell-Smith. She remained relatively inactive in political circles, and stopped giving speeches, but continued to write. She prepared a display on the history of women's suffrage for the 1906 Exhibition in Christchurch, and wrote the pamphlet Woman Suffrage in New Zealand for the International Women's Suffrage Alliance in 1907. The following year she travelled to England for her son's wedding, visiting the headquarters of the WCTU in Chicago on the way, and meeting with suffrage groups after arriving in Britain. In 1912–13, she travelled with Lovell-Smith and his wife Jennie through India and Europe. While she did not recover her former Energy, her health had stopped declining, and she continued to influence the New Zealand women's movement to a great extent, including being the first to sign a petition to the Prime Minister Sir Joseph Ward in 1916, asking him to urge the British government to enfranchise women, and with a group of other prominent suffragettes revitalising the National Council of Women in 1918. Sheppard was elected President of the National Council that year before stepping down in 1919.

Sheppard's election as President, instead of fellow feminist Lady Anna Stout, had caused a rift in the organisation. This, along with other disagreements such as whether the Council should support New Zealand's involvement in the Second Boer War, contributed to the organisation going into recess in 1906.

In 1925, Sheppard married Lovell-Smith, her first husband having died in 1915 in England, and Lovell-Smith's wife having died in 1924. Lovell-Smith died only four years later, and Sheppard herself died in Christchurch on 13 July 1934. As her son had died in 1910, and her only grandchild in 1930, Sheppard left no descendants. She was buried at Addington Cemetery, Christchurch, in a family grave.

The play O Temperance, about Sheppard and the temperance movement, was written by New Zealand Playwright Mervyn Thompson. It was first performed in 1972 at the Christchurch Court Theatre. In 2016 and 2017 the production That Bloody Woman which re-imagined Kate Sheppard's life as a punk rock musical toured New Zealand.

Due to her role as the de facto leader of New Zealand's pioneering women's suffrage movement, Sheppard is widely regarded as one of New Zealand's most prominent figures. In 1991, Sheppard's likeness replaced that of Queen Elizabeth II on the front of the New Zealand ten-dollar note.

Sheppard is considered to be an important figure in New Zealand's history. Since 1992 her profile has featured on the New Zealand ten-dollar note. A 2005 television show New Zealand's Top 100 History Makers ranked Sheppard as the second most influential New Zealander of all time. Similarly, the New Zealand Herald selected Sheppard as one of their ten greatest New Zealanders in 2013.

In 1993, the centenary of women's suffrage in New Zealand, a group of Christchurch women established two memorials to Sheppard: the Kate Sheppard National Memorial, on the banks of the Avon River, and the Kate Sheppard Memorial Trust Award, an annual award to women in research. That year a special paeony style white camellia was created at Camellia Glen Nurseries in Kaupokonui, Taranaki. It was named after Kate Sheppard and planted extensively throughout New Zealand. (White camellias were a symbol of the Suffragists.)

Several New Zealand schools have houses named after Sheppard. In 2014, students at Whangarei Girls' High School asked the school to re-name a house named after Richard Seddon, a known opponent of women's suffrage, to Sheppard House to better reflect the values of the school.

On 8 March 2018, coinciding with International Women's Day and in celebration of the 125th anniversary of the women's suffrage movement, New Zealand Football renamed its premier knockout football tournament the Kate Sheppard Cup.