Anna Mary Sewell was born in Great Yarmouth, Norfolk, England into a devoutly Quaker family. Her father was Isaac Phillip Sewell (1793-1879), and her mother, Mary Wright Sewell (1798 - 1884) was a successful author of children's books.

Anna Sewell had one sibling,a younger brother named Philip Sewell (1822–1906) who worked as a construction engineer in Europe, building railways in Spain and elsewhere, before settling back in Norfolk and working as a banker.

Anna Sewell was largely educated at home, a regime heavily influenced by her mother's religious and educational convictions. When Anna was twelve years old, the family moved to Stoke Newington, where Sewell attended school for the first time and gained instruction in areas new to her such as mathematics and foreign languages. Two years later, however, she slipped while walking home from school and severely injured both of her ankles. Her father took a job in Brighton in 1836, partly in the hope that the climate there would help to cure her. Despite this, and most likely because of mistreatment of her injury, Sewell was lame for the rest of her life and was unable to stand without a crutch or to walk for any length of time. For greater mobility, she frequently used horse-drawn carriages, which contributed to her love of horses and concern for the humane treatment of animals.

At about this time, both Anna and her mother left the Society of Friends to join the Church of England, though both remained active in evangelical circles. Her mother expressed her religious faith most noticeably by authoring a series of evangelical children's books, which Anna helped to edit, though all the Sewells, and Mary Sewell's family, the Wrights, engaged in many other good works.

While seeking to improve her health at European spas, Sewell encountered various writers, artists, and philosophers, to which her previous background had not exposed her.

Sewell's only published work was Black Beauty, written during 1871 to 1877, after she had moved to Old Catton, a village outside the city of Norwich in Norfolk. During this time her health was declining. She was often so weak that she was confined to her bed and writing was a challenge. She dictated the text to her mother and from 1876 began to write on slips of paper which her mother then transcribed.

Sewell sold the novel to local publisher Jarrolds for £40 on 24 November 1877, when she was 57 years of age. Although now considered a children's classic, she originally wrote it for those who worked with horses. She said "It's a special aim being to induce kindness, sympathy, and an understanding treatment of horses." (Mrs Bayly, 272).

"There is no religion without love, and people may talk as much as they like about their religion, but if it does not teach them to be good and kind to other animals as well as humans, it is all a sham."

—Black BeautyChapter 13, last paragraph.

The book's sales broke publishing records, it is said to be "The sixth best seller in the English language." (Chitty in Wells and Grimshaw, x).

Sewell died of hepatitis or phthisis on 25 April 1878, five months after her book was published, living long enough to see the book's initial success. She was buried on 30 April 1878 in the Quaker burial-ground at Lammas near Buxton, Norfolk, not far from Norwich, where a wall plaque now marks her resting place.

Her birthplace in Church Plain, Great Yarmouth, is now a museum. For ten years, she lived at Blue Lodge, Abson, between Bristol and Bath. The local estate of Tracy Park, now a golf club, was said to be the inspiration for Black Beauty's Birtwick Park. Blue Lodge is privately owned.

The cottage where she lived from 1866 until her death, in Old Catton...then a village but now a suburb of Norwich...remains a private residence. Other Norwich attractions have grown around the Sewell name including the Sewell Barn Theatre, a popular local theatre company which was part of the estate originally owned by Phillip Sewell and Sewell Park which opened on 19 July 1909, its unusual triangle-shaped granite water trough is used for a floral display and names of various Sewell family members are inscribed on it.

On 11 October 2007 the house in Spixworth Road, Old Catton where Anna Sewell is said to have written her novel went on sale with an asking price of £625,000.

The former Blyth-Jex school, adjacent to Sewell Park, was renamed Sewell Park College in September 2008.