Sarah was well educated, and she was very interested in literature and politics. In 1741, Sarah contracted smallpox, although she appears to have survived it without very significant scarring. Her sister Elizabeth, after becoming friend to Lady Margaret Harley and being introduced to the highest circles of London life, married Edward Montagu. Sarah then moved back home to tend to her mother, who was dying of cancer. When Sarah's mother died in 1746, she went with Elizabeth to Bath for a visit. There she met her future longtime companion, Lady Barbara Montagu. In 1748, the two women pooled their finances and took a house together.

When Sarah was twenty, she contracted to marry a George Lewis Scott, a friend of the family's from Canterbury who was twelve years older than Sarah. He had no profession or private income, however, and Sarah's dowry amounted to only fifteen hundred pounds, so before the two could wed, Sarah, through her friend "Lady Bab" and sister, secured George Lewis Scott a position as a sub-preceptor to George, Prince of Wales (later King George III). Prince George had lately succeeded his father, Frederick, upon Frederick's death in March 1751.

According to Barbara Schnorrenberg, Sarah lived with her sister, Elizabeth, and was treated as a servant, and this is why she was willing to make an unsuitable and undesired marriage. Sarah and George Lewis Scott were married in June 1751. The marriage, according to family letters, was never consummated (Kelly, 469), and in April of 1752 something happened that brought both Sarah's father and brothers to come to London to remove her from her husband's house. When she was no longer with her husband, she was her father's charge, and he gave her no money at all. Further, he forbade Elizabeth or Sarah's brother Matthew from relieving Sarah's poverty. George Lewis Scott agreed to pay her a settlement of a hundred pounds a year.

Sarah and Lady Barbara Montagu settled in Bath, where they lived frugally and became active in helping the poor, and especially poor women. They began a project of creating cottage industries for poor and disgraced women, and they began attempting to educate the poor in 1754. Sarah Scott had written her first novel the year before her marriage, in 1750: The History of Cornelia. It was a portrait of an ideal and pious young woman. In 1754, she attempted to generate an income by translation and wrote An Agreeable Ugliness based on an exaggeratedly moralistic French source. The same year, she also wrote A Journey through every Stage of Life, which is an Arabian Nights-styled series of tales told by a young serving girl to a displaced princess.

In 1760, with the accession of George III, she wrote a political work about Gustav I of Sweden, The History of Gustavus Ericson, King of Sweden, picking up on the theme of the patriot king. She also wrote The History of Mecklenburg, from the First Settlement of the Vandals in that Country to the Present Time the next year, to capitalize on the public's interest in George III's wife, Charlotte.

In 1762, Scott published her novel, A Description of Millenium Hall and the Country Adjacent (her spelling). It went through four editions, and interest in it as a feminist text has revived in the 21st century.

In 1763, Lady Barbara Montagu gained a pension of three hundred pounds. This eased the couple's finances sufficiently that Sarah Scott would not need to write again while she lived. Lady Barbara died in 1765, and Sarah Scott wrote The History of Sir George Ellison in 1766. The novel was, again, utopian, but it was derivative of Richardson's Sir Charles Grandison. The next year, she attempted to create a real Millennium Hall in Buckinghamshire. She invited Sarah Fielding, among others, to come live with her. Elizabeth Montagu donated livestock, land, and staff. However, the project fell through in a couple of months.

In 1772, she responded to emerging populism with The Life of Theodore Aggrippa d'Aubigne, which was a life of a Protestant who fought against both mob rule and the absolute monarchy of the king. She also wrote, that year, The test of filial duty, in a series of letters between Miss Emilia Leonard, and Miss Charlotte Arlington, which was an epistolary novel addressing the rights of a daughter to choose her husband. It was also a partial response or imitation of Tobias Smollett's The Expedition of Humphry Clinker (1770).

In 1775, Edward Montagu, Elizabeth's husband, died. Elizabeth then gave Sarah two hundred pounds a year. In 1778, Sarah's father died, which gave her more money. Thus, she produced no more published works.

She had suffered from migraines throughout her life. On November 11, 1795, she died in Catton. By that point, she was largely forgotten.

If lesbianism is a romantic orientation of a woman exclusively toward women, then Sarah Scott was unambiguously lesbian. She loved Lady Barbara Montagu, and she cited the refusal of her husband to have Lady Barbara in the house as a reason for the couple's estrangement. At the same time, Scott's novels avoid any consideration of heterosexual eroticism in any form. However, Scott's works are unrelentingly pious, and pious in a very dichotomous way. Her fictions deal with sin in a savage manner, with the fires of Hell never far from any malefactor. Therefore, it is at least doubtful that Scott was terribly interested or free with whatever carnal attraction she may have had.

Scott's female characters are not liberated. They are entirely subjugated in their emancipation, for they escape a powerlessness at the hands of men for a sense of duty, both religious and social, that removes any sense of egoism. Therefore, seeing her works as "feminist" is uncomfortable, just as seeing them as "lesbian" would be.