Nancy Lamoureux Wilson was born March 16, 1954, in San Francisco, California, the third and youngest child of John Wilson (d. 2000), and Lois Mary Wilson (née Dustin; d. 2006). She has two older sisters, Lynn and Ann. Both of Wilson's parents were natives of Oregon—her father from Corvallis, and her mother from Oregon City. Her middle name is derived from her grandmother, Beatrice Lamoureux. Wilson is of French Canadian and Scottish descent. She was raised in Southern California and Taiwan before the family's U.S. Marine Corps father retired to the Seattle suburb of Bellevue, Washington, where they relocated when Wilson was six years old. The family lived in a Colonial home in the Lake Hills neighborhood.

On February 9, 1964, Wilson and her sister Ann saw The Beatles perform on The Ed Sullivan Show, a moment they each recalled as being profoundly influential: "The lightning bolt came out of the heavens and struck Ann and me the first time we saw The Beatles on The Ed Sullivan Show... There'd been so much anticipation and hype about The Beatles that it was a huge event, like the lunar landing; that was the moment Ann and I heard the call to become rock musicians. I was seven or eight at the time... right away, we started doing air guitar shows in the living room, faking English accents, and studying all the fanzines." On August 25, 1966, The Beatles performed at the Seattle Center Coliseum, a show which Wilson, her sister Ann, and bandmates attended, another event both recalled as influential in their early lives.

Two of the Wilson sisters' friends joined them to form the Wilsons' first music group, The Viewpoints. The Viewpoints were a four-part harmony vocal group. Later that year, Ann purchased her first guitar, a Kent acoustic, with money given to her by her grandmother. Wilson's parents soon bought Nancy a smaller guitar, but since it would not stay in tune, she began playing Ann's Kent guitar. The Viewpoints' first public show was a folk festival on Vashon Island in 1967. In Wilson's words, "We didn't get paid, but since there were people sitting in folding chairs, we considered it a professional gig." The band played at venues such as drive-ins, auto shows, and church socials.

The Wilsons' public debut as a duo took place on Mother's Day at their church. Later at a church Youth Day event, the duo performed "The Great Mandala (The Wheel of Life)" by Peter, Paul and Mary, Elvis Presley's "Crying in the Chapel", and The Doors' "When the Music's Over". The anti-war sentiment, and the irreverence for the venue in some of the lyrics, offended a number of people. By the time they finished, more than half had walked out. Wilson felt some guilt over the event, but "it lit a bonfire under us because we saw for the first time that what we did on stage could have an impact on an audience."

Wilson dated bandmates Roger Fisher and Michael Derosier during the early years of Heart. In 1981, Wilson's friend Kelly Curtis introduced her to screenwriter Cameron Crowe; Wilson married him on July 27, 1986. After numerous failed fertility treatments, Wilson and Crowe conceived via an egg donor and surrogate, and the surrogate gave birth to twin sons, Curtis Wilson and William "Billy" James Crowe, in January 2000. The marriage ended in divorce in 2010, with the couple citing irreconcilable differences.

In 2011, Wilson began dating Geoff Bywater, who worked in music production on television shows for Fox. They were engaged in 2012 and married on April 28, 2012, in Mill Valley, California.

On the morning of August 27, 2016, Ann Wilson's husband, Dean Wetter, was arrested for physically assaulting Nancy Wilson's 16-year-old twin sons. The incident took place during a Heart performance at the White River Amphitheater in Auburn, Washington the previous night. The sisters' relationship was strained by the incident. Wetter pleaded guilty to two nonfelony assault charges in the fourth degree. Nancy Wilson later commented: "I'm an eternal optimist because I'm from a really strong, tight family, and I don't think any drama that's temporary is going to change our strong relationship. We just have to get through this first. It's been kind of a nightmare." In February 2019, Heart announced that its hiatus had ended and that the band would embark on the Love Alive tour in the summer.