She is the daughter of the film producer Richard B. Goodwin and the interior decorator Jocasta Innes. Her half-brother is the writer Jason Goodwin, whom her father adopted. Her great-great-great grandfather was Robert Traill, whose character she included in an episode of the second season of her TV drama "Victoria" which addressed the Irish Great Famine. Traill was played by Martin Compston.
After attending Queen's College, London and Westminster School, Goodwin studied history at Trinity College, Cambridge and attended Columbia Film School before joining the BBC as a trainee arts producer in 1985. In 1998, she moved to Talkback Productions as head of factual programmes, and in 2005, founded Silver River Productions. Her first novel, My Last Duchess, was published in the UK in August 2010 and, under the title The American Heiress, in the U.S. and Canada in June 2011. She has also published eight poetry anthologies and a memoir entitled Silver River, and was chairman of the judging panel for the 2010 Orange Prize for women's fiction. She has presented television shows including Essential Poems (To Fall In Love With) (2003) and Reader, I Married Him (2006). She is the author of the 2016 novel, Victoria and the creator and writer of the TV series Victoria airing in the UK on ITV, and in the US on PBS/Masterpiece in January 2017.
In November 2017 Goodwin claimed that on a professional visit to 10 Downing Street she had been indecently touched by a civil servant, but had not complained at the time.
Goodwin is married to Marcus Wilford, an ABC TV executive; they have two daughters. She appeared in the BBC television documentary Public School about Westminster directed by Jonathan Gili, and as part of the winning Trinity College, Cambridge team on the Christmas University Challenge BBC2, 27 December 2011. In 2012, she appeared on a Children in Need special episode of "Only Connect" alongside Charlie Higson and Matthew Parris.