After her father died in action in Ashanti in 1900, Marguerite was adopted by Joseph and Margaret Steen and was educated at Kendal High School. At 19 she became a teacher in a private school, travelling to France and Spain in the long school holidays. After three years, she left for London to fulfil her ambition of working in the theatre. In 1921, she joined the Fred Terry/Julia Neilson drama company at £3 per week and spent three years touring. Befriended by Ellen Terry, she took her advice on finding herself unemployed and wrote a novel. The Gilt Cage(1927) was followed by 40 more books, including biographies of the Terrys, Hugh Walpole, 18th-century poet and actress Mary ‘Perdita’ Robinson and her own lover, artist Sir William Nicholson. According to Steen's Looking Glass, they met in Andalucia in May 1935 and, by mid-June, lived at Nicholson's studio in Apple Tree Yard, off Jermyn Street. Steen also drew illustrations for Oakfield Plays and a watercolour sketch of Ellen Terry is at the V&A Museum.
In 1930s she wrote several plays, but her forte was the historical novel. Matador (1934) drew on her love of Spain and bullfighting. Another best-seller was a massive slave trade saga, The Sun Is My Undoing (1941), which literary critics called "vigorous but tinselly". Elected a Fellow of RSL in 1951, her two volumes of autobiography, Looking Glass (1966) and Pier Glass (1968) describe English creative set 1920s-1950s. The Sun Is My Undoing was dramatised on BBC Radio 4 in 1973 in five parts. She died in 1975. The emergence of ebooks in the 20th century led to a rediscovery of her work for new readers and new markets.