Born in Portland, Oregon, she moved to Iowa with her family as a child. She attended the University of Minnesota, where she served as a student senator, before getting a law degree from Harvard University in 1964. Moving to Denver, Colorado, she worked for the National Labor Relations Board from 1964 to 1966. She later worked for Planned Parenthood and taught in Denver's public schools.

In 1972, she won election for Congress in Colorado's 1st District, based in Denver, over freshman Republican incumbent Mike McKevitt. McKevitt, previously the Denver district attorney, had been the first Republican to represent the district, regarded as the most Democratic in the Rockies, since 1933. Schroeder won by just over 8,000 votes, but was re-elected eleven times without a contest nearly as close.

While in Congress, she became the first woman to serve on the House Armed Services Committee, and was a prime mover behind the Family and Medical Leave Act. She briefly entertained the notion of running for President in 1988, before announcing her withdrawal in an emotional press conference on September 28, 1987. This earned her a lampoon on Saturday Night Live, where Schroeder (played by Nora Dunn) repeatedly burst into tears while moderating a Democratic primary debate.

She is perhaps best known, however, for saying, of Ronald Reagan, "He's just like a Teflon frying pan: Nothing sticks to him." Ironically, her characterization did stick, and the phrase "Teflon President" entered the American political lexicon. She did not seek a 13th term in 1996, and was succeeded by state house minority whip Diana DeGette, a fellow Democrat.

Since 1997, she has been the President and CEO of the Association of American Publishers. She has been a vocal proponent of stronger copyright law, opposing attempts like Eldred v. Ashcroft put limits on copyright length, attempts like Google Print to digitize books, and the use of ebooks in libraries.