Sabine Lepsius was born in Berlin in 1864 into a well-off Jewish family. She was the daughter of the painter Gustav Graef and the lithographer Franziska Liebreich. From 1879 to 1881 she attended the Royal Academic Conservatory in Berlin, though she left it in frustration at its lack of educational opportunities for women. She subsequently took painting lessons with Karl Gussow from 1884 to 1885. Lepsius was given her first commissions for portrait painting while staying in Rome, where she began studying in 1887. In 1889, she shared a studio there with Reinhold Lepsius. From autumn 1889 to the summer of 1890, Lepsius attended the Academie Julian in Paris. She married Reinhold Lepsius in 1892, and they lived first in Munich, then in Berlin. Their son Stefan lost his life in the First World War.
Lepsius and her husband ran a salon in Berlin-Westend that was frequented by personalities from the artistic and intellectual worlds, such as Stefan George, Hugo von Hofmannsthal, Rainer Maria Rilke and Kathe Kollwitz. In 1898, she was one of the founding members of the Berlin Secession. Many of her more than 280 paintings (most of which were lost or destroyed in the Second World War) were portraits of members of Berlin’s Jewish community.