Born Essie Mae Moody, she was the eldest of nine children. After her parents split up, she grew up with her mother in Centreville, Mississippi, while her father lived in nearby Woodville, Mississippi. At a young age she began working for white families in the area, cleaning their houses and helping their children with homework for only a few dollars a week, while earning perfect grades in school and helping at church. In the community she often heard stories of interracial sexual abuse, miscegenation, lynching, arson and other acts of racial intimidation. After graduating with honors from a segregated, all-black high school, she attended Natchez Junior College (also all black) in 1961 under a basketball scholarship.

Then she moved on to Tougaloo College on an academic scholarship to get full degree. At Tougaloo, she became involved with the Congress of Racial Equality (CORE), National Association for the Advancement of Colored People, and Student Nonviolent Coordinating Committee. After graduating, Moody became a full-time worker in the Civil Rights Movement, participating in a Woolworth's lunchcounter sit-in and protests in Jackson, Mississippi. During Freedom Summer, she worked for CORE in the volatile town of Canton, Mississippi.

Her autobiography Coming of Age in Mississippi is acclaimed for its realistic portrayal of life for a young African American before and during the Civil Rights Movement of the 1960s.

In the memoir, Moody gradually developed a position of leadership. Though she faced male dominance and terror from white supremacists during her days in the struggle, Anne refused the idea of being sheltered and worked as hard as any man did for independence. She fought for the freedom of her race demonstrating that liberation was as important to black women as it was to black men. She made herself known as an activist and stood out as a woman who had her own significant voice. Moody worked in dangerous areas in Mississippi and as her position of power grew, the more threatening her work became. She even sacrificed seeing her family for the sake of the movement. Since she was so well known, she could not return to her hometown without putting her family in danger of being abused by the white law enforcement officials. She used her prominent position to educate others on important racial issues. She worked to help young children receive an education so that when they grew up they would have more opportunities available to them. She worked with teenagers as well, for she believed that they were the ones who were going to make significant changes. The work she did with adults was particularly hard because they were either so set in their ways or too afraid to change the things that Anne questioned. Those who tried to vote or join the civil rights movement were often fired from their jobs or suffered beatings or abuse from white people.

Moody's philosophy as an activist prefigured the black power ideologies that emerged from the nonviolent civil rights. She wanted to take power from the whites and she wanted to encourage other members of the black community to do so as well. She understood though that male dominance was prevalent in the Black Power Movement which would not have allowed her to participate as much as she would have liked. In the non-violent Civil Rights Movement, women were allowed much larger roles than in the Black Power Movement. Anne did not agree with the passivity of the non-violent movement. What she dreamed of was a coupling of the rights women had in the non-violent Civil Rights Movement with the strength of the Black Power movement. Anne did not want any man to take credit for the work that she did. She set a strong example for the women who came after her to follow as they faced continual oppression in the form of the male dominance of the black race.

In 1972 she worked as an artist-in-residence in Berlin. She went on to work at Cornell University and sold a collection of stories in 1975. She has one daughter and does not grant interviews or do public appearances. However she does work as a Counselor for the New York City Poverty Program and lives in the city.