She was born on Christmas Day in Cockermouth, Cumberland in 1771. Despite the early death of her mother, Dorothy, William and their three siblings had a happy childhood. In 1783 their father died, and the children were sent to live with various relatives. Dorothy was sent alone to live with her aunt Elizabeth Threlkeld in Halifax, West Yorkshire. After she was able to reunite with William firstly at Racedown Lodge in Dorset in 1795 and afterwards (1797/98)at Alfoxden House in Somerset, they became inseparable companions. The pair lived in poverty at first; and would often beg for cast-off clothes from their friends.

William wrote of her in his famous Tintern Abbey poem:

Of this fair river; thou my dearest Friend,

My dear, dear Friend; and in thy voice I catch

The language of my former heart, and read

My former pleasures in the shooting lights

Of thy wild eyes [...]

My dear, dear Sister!

Dorothy was a diarist and poet but had little interest in becoming a famous writer like her brother. "I should detest the idea of setting myself up as an author," she once wrote, "give Wm. the Pleasure of it." She almost published her travel account with William to Scotland in 1803 Recollections of a Tour Made in Scotland, but a publisher was not found and it would not be published until 1874.

She never married, and after William married Mary Hutchinson in 1802, she continued to live with them. She was by now 31, and thought of herself as too old for marriage. In 1829 she fell seriously ill, and was to remain an invalid for the remainder of her life. She died at the age of eighty-three in 1855, having spent the past twenty years in, according to the biographer Richard Cavendish, "a deepening haze of senility".

Dorothy's Grasmere Journal was first published in 1897, edited by William Knight. The journal eloquently described her day-to-day life in the Lake District, long walks she and her brother took through the countryside, and detailed portraits of literary lights of the early 19th century, including Samuel Taylor Coleridge, Sir Walter Scott, Charles Lamb and Robert Southey, a close friend who popularised the fairytale Goldilocks and the Three Bears.

Dorothy Wordsworth's works came to light just as literary critics were beginning to re-examine women's role in literature. The success of the Grasmere Journal led to a renewed interest in Wordsworth, and several other journals and collections of her letters have since been published.

The Grasmere Journal and Wordsworth's other works revealed how vital she was to her brother's success. William relied on his sister's detailed accounts of nature scenes when writing poems and borrowed freely from her journals.