Virginia Satir was born 26 June 1916 in Neillsville, Wisconsin, the eldest of five children born to Oscar Alfred Reinnard Pagenkopf and Minnie Happe Pagenkopf. When she was five years old, Satir suffered from appendicitis. Her mother, a devout Christian Scientist, refused to take her to a Doctor. By the time Satir's father decided to overrule his wife, the young girl's appendix had ruptured. Doctors were able to save her life, but Satir was forced to stay in the hospital for several months.

In 1929, her mother insisted that the family move from their farm to Milwaukee so that Satir could attend high school. Satir's high school years coincided with the Great Depression, and to help her family she took a part-time job and also attended as many courses as she could so that she could graduate early. In 1932, she received her high school diploma and promptly enrolled in Milwaukee State Teachers College (now University of Wisconsin–Milwaukee.) To pay for her education she worked part-time for the Works Projects Administration and for Gimbels Department Store and further supplemented her income by babysitting. She graduated with a bachelor's degree in education, and worked as a Teacher for a few years.

After graduating social work school, Satir began working in private practice. She met with her first family in 1951, and by 1955 was working with Illinois Psychiatric Institute, encouraging other therapists to focus on families instead of individual patients. By the end of the decade she had moved to California, where she cofounded the Mental Research Institute (MRI) in Palo Alto, California. MRI received a grant from NIMH in 1962, allowing them to begin the first formal family therapy training program ever offered; Satir was hired as its Training Director.

Satir published her first book, Conjoint Family Therapy, in 1964, developed from the training manual she wrote for students at MRI. Her reputation grew with each subsequent book, and she travelled the world to speak on her methods. She also became a Diplomate of the Academy of Certified Social Workers and received the American Association for Marriage and Family Therapy's Distinguished Service Award.

In the mid-1970s her work was extensively studied by the co-founders of Neuro-linguistic programming (NLP), Richard Bandler and John Grinder, who used it as one of the three fundamental Models of NLP. Bandler and Grinder also collaborated with Satir to author Changing With Families for Science and Behavior Books, which bore the subtitle 'A Book About Further Education for Being Human'. The Virginia Satir Global Network, originally named "AVANTA" by Satir, is an international organization that carries on her work and promotes her approach to family therapy.

She has also been recognized with several honorary doctorates, including a 1978 doctorate in Social Sciences from the University of Wisconsin–Madison.

In 1984, Satir encouraged marriage and family therapists to shift their focus to relationship education:

Satir's entire work was done under the umbrella of "Becoming More Fully Human". From the possibility of a nurturing primary triad of father, mother, and child she conceived a process of Human Validation. She continually planted the seeds of hope toward world peace. As she said (Align, 1988, p. 20): "The family is a microcosm. By knowing how to heal the family, I know how to heal the world." With this overview she established professional training groups in the Satir Model in the Middle East, the Orient, Western and Eastern Europe, Central and Latin America, and Russia. The Institute for International Connections, Avanta Network, and the International Human Learning Resources Network are concrete examples of teaching people how to connect with one another and then extend the connections. Her world impact could be summed up in her universal mantra: peace within, peace between, peace among.

She is also known for creating the Virginia Satir Change Process Model, a psychological model developed through clinical studies. Change management and organizational gurus of the 1990s and 2000s embrace this model to define how change impacts organizations.

Steve Andreas, one of Bandler and Grinder's students, wrote Virginia Satir: The Patterns of Her Magic (1991) in which he summarized the major patterns of Satir's work, and then showed how Satir applied them in a richly annotated verbatim transcript of a videotaped session titled "Forgiving Parents". In this session, Satir works with a woman who hated her mother, and had difficulty connecting with others as a result. Using a variety of role-plays, including a "family reconstruction", this woman came to see her mother as her "best friend", as detailed in a 3½ year follow-up interview.