Phoenix was born Rain Joan of Arc Bottom in Crockett, Texas, the second child of John Lee Bottom and Arlyn Sharon (née Dunetz). Her mother was born in the Bronx, New York to Jewish parents from Hungary and Russia. Her father was a lapsed Catholic from Fontana, California. In 1968, Phoenix's mother left her family and moved to California, meeting Phoenix's father while hitch-hiking. They married in 1969 and joined Children of God and worked as missionaries in South America. It was there, at the age of three, that Phoenix (accompanied by elder brother River on guitar) first began to sing. They would perform on the streets of Caracas, Venezuela for loose change while handing out Christian flyers to passers by. The family set out for California in order for the children to enter the entertainment industry. In West Los Angeles, Phoenix and her siblings would perform on the streets for crowds of people. Arlyn took a job at NBC and eventually secured all five Phoenix children with an agent.

Phoenix sang with brother River as an audience warm up act on the show Real Kids (1982). Various bit parts followed in TV shows including Family Ties in 1987. Also in 1987, Phoenix landed a part in the feature film Maid to Order alongside Ally Sheedy.

At 15, Phoenix returned to her roots in music and formed the band Aleka's Attic with her then 17-year-old brother River. River, along with bass player Josh McKay, wrote music and lyrics and Rain sang backup. The band secured gigs in and around their home town of Gainesville, Florida By this time, River's career had taken off and so the band was often put on hold for River's demanding schedule. In 1988, Aleka's Attic were signed to a development deal with Island Records and in 1989 released the track "Across The Way" on a benefit album for the animal rights group PETA. In 1991, they made a tour of east coast clubs and colleges. At this time, Phoenix joined her brother River on the set of his tenth movie, My Own Private Idaho. She met Director Gus Van Sant to whom River suggested she would be perfect for a role in his upcoming project, a film adaptation of Tom Robbins's cult novel, Even Cowgirls Get the Blues. She was cast as head cowgirl Bonanza Jellybean, alongside Uma Thurman.

A few months after the film's completion, Phoenix flew to Los Angeles with her brother Joaquin to meet River during a break from Dark Blood. On the evening of October 30, 1993, they set out, joined by River's girlfriend Samantha Mathis, for a night at the Los Angeles club The Viper Room, which was in part owned by Johnny Depp. It would be the last evening Phoenix would spend with her brother; he died later that night from, according to the coroner's report, "acute multiple drug intoxication," namely an overdose of heroin and cocaine, a concoction called a "speedball".

In 1994, Phoenix joined R.E.M. in the studio to record backup vocals on the song "Bang and Blame", to be released on the 1995 album Monster, an album dedicated to River. In 1995 Phoenix joined the Red Hot Chili Peppers as a backup singer on their One Hot Minute tour. Chili Peppers Bassist Flea, who appeared in My Own Private Idaho, was close friends with River, and was there the night he died. The band wrote their song "Transcending" as a tribute to River. She also features in the video for R.E.M.'s "At My Most Beautiful."

In 1997, Phoenix joined the punk/new wave band The Causey Way, which also included her younger sisters Summer and Liberty. They disbanded in 2001 after the release of two albums and two EPs.

Phoenix returned to acting in 1998 with parts in I Woke Up Early the Day I Died (1998), O (2001), Harry and Max (2004) and Hitch (2005).

Phoenix formed the band Papercranes in 2003 and is lead singer and lyricist. Their self-titled EP was released in 2004 and their first album, Vidalia, in 2006. Their album "Let's Make Babies in The Woods" was released in early 2011. Guest Musicians include Phoenix's younger sisters Summer and Liberty, as well as actor Dermot Mulroney, Libby Lavella, and Flea of the Red Hot Chili Peppers, who also was a guest musician on tracks for Aleka's Attic in the '90s.

Phoenix continues to split her time between writing, recording and performing with the band and working on various TV and film projects. It was announced in 2010 that Papercranes had signed with Manimal Vinyl and they released their latest second album Let's Make Babies in the Woods in January 2011.