Peggy Bacon was born in 1895 in Ridgefield, Connecticut, and grew up an only child after the death of two younger brothers in infancy. Her parents, Charles Roswell Bacon and Elizabeth Chase Bacon, had met at the Art Students League, where her father had studied with Robert Henri. Her father pursued a career in painting and writing until his suicide in 1913, and her mother painted miniatures.
A child of artists, Bacon began to draw at a very early age, and by age ten she was already earning money for her illustrations, drawings of literary characters made for dinner place cards. She did not attend school until 1909, when her parents sent her to a boarding school in Summit, New Jersey. She began her formal art training shortly after her father's death, enrolling in the School of Applied Arts for Women at the end of 1913. In the summer of 1914, she attended Jonas Lie's landscape class in Port Jefferson, Long Island, and continued private studies with him in New York City. Lie gave Bacon her first solo exhibition in 1915. From 1915 until 1920, she studied at the Art Students League under John Sloan, Kenneth Hayes Miller, George Bellows, Mahroni Young, and others. In the summers, she took classes first in Provincetown, Massachusetts, and then in Woodstock, New York, where she studied with Andrew Dasburg.
Bacon's circle was formed at the Art Students League, and the League's summer school in Woodstock. She met her husband, Alexander Brook, in Woodstock, and they were married in 1920. Both were active in the Woodstock Artists Association. Other artists in their close-knit group included Dorothea Schwarz (Greenbaum), Anne Rector (Duffy), Betty Burroughs (Woodhouse), Katherine Schmidt (Kuniyoshi Shubert), Yasuo Kuniyoshi, Molly Luce, Dorothy Varian, Edmund Duffy, Dick Dyer, David Morrison, and Andrew Dasburg. Many from this group were involved in the short-lived satirical magazine at the League called Bad News, published in 1918 with several of Bacon's earliest satirical drawings. Her first book, The True Philosopher and Other Cat Tales, was published in 1919. Brook and Bacon traveled to England in 1920, where their daughter Belinda was born. A son, Sandy, was born in Woodstock in 1922. In the early 1920s, Brook worked with Juliana Force at the Whitney Studio Club, and they were involved in the cultural life that sprang up around the gallery, which featured up-and-coming artists. For many years, Bacon and her family split their time between New York and Woodstock, and later summered in Cross River, NY. After divorcing Brook in 1940, Bacon spent summers in Ogunquit, Maine.
Though she initially thought of herself as a painter, she built her reputation on her drawings and prints, which often satirized the people around her in their natural habitats - artists in life classes, at dances, and in social situations, or a throng of people in a museum, on a city sidewalk, or a ship's deck. She became sought after for her illustrations and witty, topical verse in magazines such as Dial, Delineator, The New Yorker, New Republic, Fortune, and Vanity Fair. She helped to establish the American Print Makers, an artists' organization based in the Downtown Gallery which sought greater exhibition opportunities for printmakers. Bacon illustrated over sixty books, nineteen of which she also wrote, between 1919 and 1966, including many children's books and a successful mystery novel called The Inward Eye (1952). In 1933 she received a Guggenheim Fellowship and used it to complete a collection of caricatures of art world figures called Off With Their Heads (1934), the success of which prompted a spate of commissions for caricatures. Bacon stopped making caricatures in 1935, but they include some of her best-known work.
Bacon exhibited frequently, in New York and in major museum exhibitions nationally, showing her prints, drawings, pastels, and watercolors. She had over thirty solo exhibitions at such venues as Montross Gallery, Alfred Stieglitz's Intimate Gallery, and the Downtown Gallery, and was represented by Rehn Galleries and later Kraushaar Galleries. Bacon also taught extensively in the 1930s and 1940s, at the Fieldston School, Art Students League, Hunter College, Temple University, the Corcoran Gallery, and other places. In the 1950s, she returned to painting. She made her last prints in 1955. In the early 1970s, Bacon's eyesight failed, and she eventually went to live with her son in Cape Porpoise, Maine. She died in 1987.