Forbes was born in Westborough, Massachusetts, the fifth of six children born to Harriette Merrifield and William Trowbridge Forbes. After attending school in Wisconsin, Forbes served as a member of the editorial staff at Houghton Mifflin Company in Boston. Her first novel, Oh Genteel Lady!, was published in 1926 and was made a selection by the then newly formed Book-of-the-Month Club. She married Albert Hoskins in 1926. They were divorced in 1933.

By 1938 Forbes had published a number of books, and first received critical and public acclaim for her novel, A Mirror for Witches, which was produced in several other formats (e.g., theatrical) and has never been out of print. Forbes' 1942 biography Paul Revere and the World He Lived In put her even more firmly in the spotlight and subsequently brought her the Pulitzer Prize for History. Her novel Johnny Tremain (1943), about the life of a young silversmith apprentice in Boston in the early 1770s, won the 1944 Newbery Medal and remains one of the most highly acclaimed books for young adults.

Forbes died in 1967, at age 76 in Worcester, Massachusetts.