She was born at Chur in Graubünden, Switzerland, but grew up in Schwarzenberg in Vorarlberg/Austria where her family originated. Her father, Joseph Johann Kauffmann, was a relatively poor man but a skilled painter that was often traveling around for his works. He was apparently very successful in teaching his precocious daughter. She rapidly acquired several languages from her mother Cleophea Lutz, read incessantly, and showed marked talents as a musician. Her greatest progress, however, was in painting; and in her twelfth year she had become a notability, with bishops and nobles for her sitters.

In 1754 her father took her to Milan. Later visits to Italy of long duration followed: in 1763 she visited Rome, returning again in 1764. From Rome she passed to Bologna and Venice, being everywhere feted and caressed, as much for her talents as for her personal charms. Writing from Rome in August 1764 to his friend Franke, Winckelmann refers to her exceptional popularity. She was then painting his picture, a half-length, of which she also made an etching. She spoke Italian as well as German, he says; and she also expressed herself with facility in French and English, one result of the last-named accomplishment being that she became a popular portraitist for English visitors to Rome. "She may be styled beautiful," he adds, "and in singing may vie with our best virtuosi."

While at Venice, she was induced by Lady Wentworth, the wife of the ambassador, to accompany her to London. One of her first works was a portrait of David Garrick, exhibited in the year of her arrival at "Mr Moreing's great room in Maiden Lane." The rank of Lady Wentworth opened society to her, and she was everywhere well received, the royal family especially showing her great favor. Her firmest friend, however, was Sir Joshua Reynolds. In his pocket-book, her name as Miss Angelica or Miss Angel appears frequently, and in 1766 he painted her, a compliment which she returned by her Portrait of Sir Joshua Reynolds. Another instance of her intimacy with Reynolds is to be found in her variation of Guercino's Et in Arcadia ego, a subject which Reynolds repeated a few years later in his portrait of Mrs Bouverie and Mrs Crewe. When, in about November 1767, she was entrapped into a clandestine marriage with an adventurer who passed for a Swedish count (the Count de Horn), Reynolds helped extract her.

It was doubtless owing to his good offices that she was among the signatories to the famous petition to the king for the establishment of the Royal Academy of Painting and Sculpture.

In its first catalog of 1769 she appears with "R.A." after her name (an honor she shared with one other lady, Mary Moser); and she contributed the Interview of Hector and Andromache, and three other classical compositions.

Her friendship with Reynolds was criticized in 1775 by fellow Academician Nathaniel Hone in his satirical picture "The Conjurer". This attacked the fashion for Italianate Renaissance art, ridiculed Reynolds, and included a nude caricature of Kauffmann, later painted out by Hone. The work was rejected by the Royal Academy.

From 1769 until 1782, she was an annual exhibitor, sending sometimes as many as seven pictures, generally classic or allegorical subjects. One of the most notable was Leonardo expiring in the Arms of Francis the First (1778).

In 1773 she was appointed by the Academy with others to decorate St Paul's Cathedral, and it was she who, with Biagio Rebecca, painted the Academy's old lecture room at Somerset House.

Kauffmann's strength was her work in history painting, the most elite and lucrative category in academic painting during the 18th century. Under the direction of Sir Joshua Reynolds, the Academy made a strong effort to promote history painting to a native audience who were more interested in commissioning and buying portraits and landscapes. Despite the popularity that Kauffmann enjoyed in English society and her success as an artist, she was disappointed by the relative apathy that the English had for history painting. Ultimately, she left England for the continent where history painting was better established, esteemed, and patronized.

It is probable that her popularity declined a little in consequence of her unfortunate marriage; but in 1781, after her first husband's death (she had been long separated from him), she married Antonio Zucchi (1728 – 1795), a Venetian artist then resident in England. Shortly afterward she retired to Rome, where she befriended, among others, Johann Wolfgang von Goethe, who said she worked harder and accomplished more than any artist he knew, yet always restive she wanted to do more (Goethe's 'Italian Journey' 1786 - 1788) and lived for 25 years with much of her old prestige. In 1782 she lost her father; and in 1795, her husband. She continued at intervals to contribute to the Academy, her last exhibit being in 1797.

After this she produced little, and in 1807 she died in Rome, being honored by a splendid funeral under the direction of Canova.

The entire Academy of St Luke, with numerous ecclesiastics and virtuosi, followed her to her tomb in San Andrea delle Fratte, and, as at the burial of Raphael, two of her best pictures were carried in procession.

The works of Angelica Kauffmann have retained their reputation. She had a certain gift of grace, and considerable skill in composition. By 1911, rooms decorated by her brush were still to be seen in various quarters. At Hampton Court was a portrait of the duchess of Brunswick; in the National Portrait Gallery, a self-portrait. There were other pictures by her at Paris, at Dresden, in the Hermitage at St Petersburg, and in the Alte Pinakothek at Munich. The Munich example was another  portrait of herself and there was a third in the Uffizi at Florence. A few of her works in private collections were exhibited among the Old Masters at Burlington House. But she is perhaps best known by the numerous engravings from her designs by Schiavonetti, Bartolozzi and others. Those by Bartolozzi especially still found considerable favour with collectors.

Charles Willson Peale (1741 – 1827), artist, patriot, and founder of a major American art dynasty, named several of his children after great European artists, including a daughter, Angelica Kauffman Peale.

Her life was written in 1810 by Giovanni de Rossi. It has also been used as the basis of a romance by Leon de Wailly (1838) and it prompted the novel contributed by Anne Isabella Thackeray to the Cornhill Magazine in 1875 entitled Miss Angel.

She should not be confused with painter Angelika Kaufmann, who was born in 1935 in Carinthia, Austria.