Stern studied piano at the Eastman School of Music, achieving her bachelor's in 1968, then attended the New England Conservatory of Music (1968–70). Her initial training was classical, and her interest in improvisation was sparked by her experience with figured bass realizations in early music. Her first major gigs as a jazz musician came in the early 1980s, playing in an octet with Julian Priester and Richie Cole; she also worked in R&B groups and Latin music ensembles during this decade. In the early 1990s she worked often with Lee Konitz and played with Vic Juris among others, in addition to leading her own band, with whom she recorded several albums.
- Pleiades (Philology Records, 1993)
- Fuchsia (Koch Records, 1997)
- Room Enough (Koch, 1999)
- Actual Size (Koch, 2000)
- Estrella Trio (2006)
- Gary W. Kennedy, "Peggy Stern". Grove Jazz online.