Steele was born at Broughton, Hampshire. It has often been written that the drowning of her betrothed, a Mr. Elscourt, a few hours before the time fixed for her marriage deeply affected an otherwise quiet life. However, modern research refutes the details of this story. One man did ask for the hand of Anne Steele, in 1742. This was Benjamin Beddome, but she turned him down, and remained unmarried.
Steele's hymns, which were much used by Baptists, emphasize the less optimistic phases of Christian experience. In 1760 she published Poems on Subjects Chiefly Devotional under the name Theodosia. This book had a second edition (3 vols. Bristol, 1780), for which Caleb Evans wrote a preface. Her complete works were published in one volume by Daniel Sedgwick (London, 1863), as Hymns, Psalms, and Poems by Anne Steele, with a memoir by John Sheppard. It comprised 144 hymns, 34 metrical psalms and 50 moral poems. Some of them, e.g. "Father of mercies, in Thy word," have found their way into the collections of other churches. She has been called the Frances Ridley Havergal of the 18th century. Several of Anne Steele's hymns appear in the Sacred Harp.