Margolis was born in Vilna, Lithuania in 1921. In 1941, when the Nazis occupied Lithuania, Margolis was sent to live with a Christian family. Of Jewish birth, she instead decided to voluntarily enter the Jewish Vilna ghetto in September 1942. She entered the resistance movement there and became active in the underground. She joined the Fareynikte Partizaner Organizatsye (the United Partisan Organisation), formed that same year by poet Abba Kovner. Margolis wrote Everyone was anxious to fight... Our mission was to acquire weapons, complete militarily preparations, all with the aim of provoking an uprising in the ghetto. If we perished it would be with honour, having proved to humanity that we are not sheep going meekly to the slaughter.
In June 1943 Heinrich Himmler commanded the extermination of the ghetto. 4000 Jewish residents were sent to death camps and killed; 4000 more were sent to labour camps. Margolis and her future husband were one of the few hundreds that survived the ghetto, by escaping to the surrounding forests. They contracted typhus but lived to continue their work with the resistance movement, joining a new unit and blowing up German infrastructure. Margolis was the only member of her family to survive the Holocaust .
After the war, Margolis gained a Ph.D. in biology and was a teacher until the end of the 1980s. She helped establish Lithuania's only Holocaust museum, the Green House in Vilnius. Her work in the resistance has been honoured by US congress and the British House of Lords. 
Margolis's 2010 memoir A Partisan of Vilna recounts the author's escape from the Vilna Ghetto with the FPO (United Partisan Organization) resistance movement and the time spent in the forests of Lithuania with the partisans, active on sabotaging missions.
Margolis found and published the long-lost diary of Kazimierz Sakowicz, a Polish Christian journalist who witnessed the Ponary massacre outside Vilnius, where tens of thousands of Jews were murdered. Margolis reconstructed Sakowicz's diary from fragments of paper found in lemonade bottles, text written on a 1941 calendar and other papers held in archives that were not accessible under Soviet rule.
Since 2008 Holocaust denial groups within Lithuania targeted Margolis and police have sought her arrest for war crimes against Lithuanian citizens in her role with the anti-Nazi resistance. Lithuanian newspapers have referred to her as a terrorist and a murderer.
- "Halting Holocaust obfuscation". The Guardian. 8 January 2010. Retrieved 17 September 2012.
- "Profile at the Cohen Center for Holocaust and Genocide Studies". Keene State College.
- "Women of courage: Rachel Margolis". The Independent. 9 March 2011. Retrieved 24 January 2013.
- Kazimierz Sakowicz. Yitzhak Arad, ed. Ponary Diary 1941-1943: A Bystander's Account of Mass Murder. Published in Polish in 1999 by Towarzystwo Milosnikow Wilna i Ziemi Wilenskiej and Rachel Margolis. Translation copyright 2005 Yad Vashem. p. vii
- ""'Genocide industry' has hidden agenda"". Irish Times. 5 May 2009.
- "Wiesenthal Center Protests Lithuanian Judicial Campaign to Discredit Jewish Heroes of Anti-Nazi Resistance". US Fed News Service. 28 May 2008.
- Margolis, Rachel (2010). A Partisan of Vilna,. Brighton, MA: Academic Studies Press.
- Katz, Dovid (8 January 2010). ""Halting Holocaust obfuscation"". The Guardian. Retrieved 17 September 2012.
- "Don't let Holocaust be rewritten out of history". Washington Jewish Week. 31 December 2009.
- ""I have fought once, I can fight again"". Jerusalem Post. 28 September 2012.
- "Interview with Rachel Margolis on YouTube". Retrieved 17 September 2012.
- "Digging up the future". Jerusalem Post. 8 June 2010.