Margaret Tobin was born in a two-room cottage, near the Mississippi River in Hannibal, Missouri, on what is now known as Denkler's alley. Her parents were Irish Catholic immigrants John Tobin (1823–1899) and Johanna Tobin (née Collins; 1825–1905); her siblings were Daniel Tobin (born 1863), Michael Tobin (born 1866), william Tobin (born 1869), and Helen Tobin (born 1871). Brown also had two half-sisters: Catherine Bridget Tobin (born 1856), by her father's first marriage, and Mary Ann Collins (born 1857), by her mother's first marriage. Both of Margaret's parents had been widowed young.

At age 18, Margaret relocated to Leadville, Colorado, with her siblings Daniel Tobin, Mary Ann Collins Landrigan, and Mary Ann's husband John Landrigan; Margaret and her brother Daniel shared a two-room log cabin, and she found a job in a department store. In Leadville, she met and married James Joseph Brown (1854–1922), nicknamed "J.J.", an enterprising, self-educated man. He wasn't a rich man, but she married J.J. for love. She said,

Margaret and J.J. were married in Leadville's Annunciation Church on September 1, 1886. They had two children:

The Brown family acquired great wealth when in 1893 J.J.'s mining engineering efforts proved instrumental in the production of a substantial ore seam at the Little Jonny Mine of his employers, Ibex Mining Company, and he was awarded 12,500 shares of stock and a seat on the board. In Leadville, Margaret helped by working in soup kitchens to assist miners' families.

In 1894, the Browns bought a $30,000 Victorian mansion in Denver, Colorado, and in 1897, they built a summer house, Avoca Lodge in Southwest Denver near Bear Creek, which gave the family more social opportunities. Margaret became a charter member of the Denver Woman's Club, whose mission was the improvement of women's lives by continuing education and philanthropy. Adjusting to the trappings of a society lady, Brown became well-immersed in the arts and fluent in French, German, Italian, and Russian. Brown co-founded a branch in Denver of the Alliance Française to promote her love of French culture.

After 23 years of marriage, Margaret and J.J. privately signed a separation agreement in 1909. Although they never reconciled, they continued to communicate and cared for each other throughout their lives. The agreement gave Margaret a cash settlement, and she maintained possession of the house on Pennsylvania Street in Denver and the summer house, Avoca Lodge. She also received a $700 monthly allowance (equivalent to $19,066 today) to continue her travels and social work.

Brown assisted in fundraising for Denver's Cathedral of the Immaculate Conception, which was completed in 1911. She also worked with Judge Ben Lindsey to help destitute children and establish the United States' first Juvenile court, which helped form the basis of the modern U.S. Juvenile courts system.

The Titanic sank early on April 15, 1912, at around 2:20 a.m., after striking an iceberg at around 11:40 p.m. Brown helped others board the lifeboats but was finally persuaded to leave the ship in Lifeboat No. 6. Brown was later called "The Unsinkable Molly Brown" by authors because she helped in the ship's evacuation, taking an oar herself in her lifeboat and urging that the lifeboat go back and save more people. Her urgings were met with opposition from Quartermaster Robert Hichens, the crewman in charge of Lifeboat 6. Hichens was fearful that if they went back, the lifeboat would either be pulled down due to suction or the people in the water would swamp the boat in an effort to get inside. After several attempts to urge Hichens to turn back, Brown threatened to throw the crewman overboard. Sources vary as to whether the boat went back and if they found anyone alive but Brown's efforts sealed her place in history, regardless.

Brown ran for Senate in 1914 but ended her campaign to return to France to work with the American Committee for Devastated France during World War I.

At the time of J.J. Brown's death on September 5, 1922, Margaret told newspapers, "I've never met a finer, bigger, more worthwhile man than J.J. Brown." J.J. died intestate, and five years of disputation between Margaret and her two children were required to finally settle the estate. Due to their lavish spending, J.J. left an estate valued at only $238,000, equal to $3,479,626 today. Maggie was to receive $20,000 in cash and securities (equal to $292,406 today), and the interest on a $100,000 trust fund (equal to $1,462,028 today) in her name. $118,000 was to be divided between her two children, who each received a $59,000 (equal to $862,596 today) trust fund. A court case against Catherine and Lawrence was settled privately, and Margaret and her children were reconciled at the time of Margaret's death in 1932.

Margaret Brown died in her sleep at 10:55 p.m. on October 26, 1932, at the Barbizon Hotel in New York City, New York. Subsequent autopsy revealed a brain tumor. Her body was buried along with J.J. in the Cemetery of the Holy Rood in Westbury, New York, following a small ceremony on October 31, 1932, attended only by family members. There was no eulogy.