Taylor was born in Boston and grew up with her four brothers in Chapel Hill, North Carolina, where her father Isaac Taylor was dean of the medical school at the University of North Carolina. Her mother, Trudy, grew up in Newburyport, Massachusetts, and received training as a lyric soprano in Boston.
Taylor formed her first band at age 15 and had her first record deal with Atlantic Records four years later. Produced by her manager at the time, Peter Asher, she released her debut album Sister Kate in 1971. Her second album, the 1978 self-titled Kate Taylor, was produced by her brother James and Lew Hahn on Columbia Records.
The following year Taylor released It's in There, produced by Barry Beckett at the famed Muscle Shoals studios.