Margaret "Peg" Stair was born in Chicago in 1928. She received a B.A. in government from Smith College in 1950 and then married Karl Anderson. The couple moved to Waterloo, Iowa in the early 1950s. They later moved to Cedar Falls where Peg Anderson was involved with the American Association of University Women. The couple had four children: Christy, Margaret, Bowen, and Kurt.

During the late 1960s Anderson worked as community coordinator for the Episcopal Churches of Black Hawk County, helping to respond to the needs of the low-income community. Her efforts culminated in the organization of the Logandale Low Income Housing Project. In an interview with Louise Noun, Anderson identifies this work with the low-income housing project as the period when she recognized the importance of the women's movement. Anderson remembered that "I had a sense of wanting more freedom for myself, combined with this recognition that for the disadvantaged woman, the women's movement was absolutely essential." In 1971, as a result of her growing frustration with her own achievements as well as the lack of representation by women in local politics, Anderson ran and was elected to the school board in Cedar Falls. She was the only woman on the board at that time.

Anderson continued to be active in local political and civic organizations. During the early 1970s, Anderson was (at various times) chairperson of the State Advisory Committee to the United States Commission on Civil Rights, president of the United Way of Black Hawk County, and president of Planned Parenthood of Northeast Iowa. During the early 1970s, Anderson also helped found a Women's Center (connected to the University of Northern Iowa). In 1973, Anderson and several other women formed the Black Hawk County Women's Political Caucus, an affiliate of the Iowa Women's Political Caucus (IWPC). Anderson was elected chair of the local caucus. In 1975, Anderson succeeded Roxanne Conlin as chair of the state-wide IWPC, serving in this position for two years. During this time Anderson also chaired the IWPC Republican Task Force. During her tenure as chair of the IWPC, the organization continued to grow in membership. In 1976 and 1977, the IWPC conducted successful fundraisers with Gloria Steinem and Billie Jean King. In 1977, the Iowa Women's Caucus Research and Education Center sponsored its first Girls' Leadership Camp for Iowa high school girls. In 1976 the IWPC distributed $11,610 in campaign contributions and saw the number of women legislators in Iowa increase from fourteen to seventeen. The IWPC successfully lobbied for changes in laws governing marital rape and for elimination of height and weight requirements for police officers and fire fighters. In 1977, the National Women's Political Caucus Steering Committee meeting was held in Des Moines.

In 1977 Anderson ran for mayor of Cedar Falls and lost. After the election, Anderson and her husband (an employee of John Deere) moved to Bettendorf where he had been offered a new job. It was at this time that Anderson was asked to head the state-wide effort to pass an Equal Rights Amendment to the Iowa State Constitution. Anderson worked on this campaign for two years up until the amendment's appearance on the ballot in 1980. During this campaign, Anderson debated national anti-ERA activist Phyllis Schlafly. The effort to pass the ERA (which was ultimately unsuccessful) involved organizing a large, bipartisan coalition of diverse groups with potentially conflicting views. In 1977 Anderson also served as an Iowa delegate to the National Women's Conference in Houston. In 1981, Anderson was appointed by Governor Ray to serve on the Iowa Board of Regents. Anderson was a controversial appointee because of her affiliation with the women's movement. She served for six years. In the late 1980s, Anderson and her husband moved to Tucson, Arizona. Louise R. Noun, More Strong Minded Women: Iowa Feminists Tell Their Stories (Ames: Iowa State University Press, 1992), p. 136.