Sarah was James Peale's youngest daughter and was trained by her father, and uncle Charles Willson Peale. She served as a studio assistant to her father. Her first public works date from 1816 with subjects such as flowers and still life but soon turned to portraiture, In 1818, she spent three months with Rembrandt Peale, her cousin, in Baltimore, and again in 1820 and 1822. He influenced her painting style and subject matter. For 25 years, she painted in Baltimore (1822 – 47) and, intermittently, in Washington, D.C.

She was accepted to the Pennsylvania Academy of Fine Arts in 1824 along with her sister Anna Claypoole Peale, the first women to achieve this distinction. Over 100 commissioned portrait paintings are known from her time in Baltimore and she was the most prolific artist in the city during that era. Her subjects were wealthy Baltimore residents and politicians from Washington DC.

In 1847 ill health caused her to relocate to St. Louis where she became independently successful and one of America's first professional female artists able to earn her living through her work. Most of her work from this era is in private hands and not available for viewing. Around 1860 she shifted her subjects from portraits back to still life, but with a natural arrangement rather that the formal ones of her earlier years.

She returned to her hometown in 1878, living out her last years there with her sisters Anna Claypoole (died 1879) and Margaretta Angelica (died 1879). Like her sisters she never married. She died in 1885, aged 85. She is buried at the Gloria Dei (Old Swedes') Church Burial Ground in Philadelphia.