She was the younger sister of Catharine Parr Traill, and both were educated by their parents. She wrote her first children's book in 1822, and published other children's stories in London, including books about Spartacus and Jugurtha. In London she was also involved in the anti-slavery movement. On April 4, 1831, she married John Moodie, a retired officer who had served in the Napoleonic Wars. With her husband, daughter, and sister, she emigrated to Canada into 1832, to a farm near Peterborough, Upper Canada, where her brother Samuel worked as a surveyor.
She continued to write in Canada and her letters and journals contain valuable information about life in the colony. She observed life in what was then the backwoods of Ontario, including native customs, relations between the Canadian population and recent American, the strong sense of community and the communal work known as "bees", the climate, and the wildlife. She suffered through the economic depression in 1836, and her husband served in the militia against William Lyon Mackenzie in the Upper Canada Rebellion in 1837.
As an upper class Englishwoman Susanna did not particularly enjoy "the bush," as she called it. She and John moved to Belleville in 1840, which she referred to as "the clearnings." Here she described urban life, including religion, art, and education, especially as compared to relative lack of these things in "the bush." She also learned of the Family Compact and became sympathetic to the moderate reformers led by Robert Baldwin (but not the radical reformers such as Mackenzie). This caused problems for John, who shared her views, but who was also sheriff of Belleville, and had to work with members and supporters of the Family Compact.
In 1852 she published Roughing it in the Bush, detailing her experiences on the farm in the 1830s. In 1853 she published Life in the Clearings, about her time in Belleville. she remained in her cottage in Belleville after her husband's death, and lived to see Canadian Confederation. She died in 1885.
Her books and poetry inspired Margaret Atwood's own collection of poetry, titled The Journals of Susanna Moodie, published in 1970.