Born in Hartford, Connecticut, Brown learned to play guitar at eight and banjo at ten. When she was twelve, she met fiddler Stuart Duncan. In the summer of 1978, Brown traveled across the country with Duncan and his father, playing at festivals and contests. She won first place at the Canadian National Banjo Championship, which helped her land a one-night gig at the Grand Ole Opry.

In 1980, Brown went to Harvard university, where she studied history and literature. After graduating from Harvard, she earned an MBA from UCLA.

In 1982, while still at Harvard, Brown helped to reunite the Northern Lights band after 5 years of their hiatus, as she become their full member until 1984, when she moved back to California. Brown worked for two years with Smith Barney in San Francisco, and then took a break to pursue her music interests.

In 1987, Alison Krauss asked Brown to join her band, Union Station. Brown spent three years with Krauss. In 1990, she moved to Tennessee, and was named International Bluegrass Music Association Banjo Player of the Year in 1991. The 1990 album I've Got That Old Feeling, which Brown played banjo on, won a Grammy award.

In 1992, Brown became the band leader for Michelle Shocked. This experience led Brown to merge bluegrass with jazz and folk idioms, in a manner similar to those of Béla Fleck and David Grisman.

In the early 1990s, Brown and her husband, bass player Garry West, started their own record label, Small World Music. This company eventually led to the launch of Compass Records in 1995, an internationally recognized label, which has such artists as Victor Wooten, Colin Hay, Catie Curtis, Lúnasa, Martin Hayes, Jeff Coffin, Russ Barenberg, Darol Anger and others.

In collaboration with Béla Fleck, she won the 2000 Grammy for Best Country Instrumental Performance. She participated in Alison Krauss’s Grammy-winning album I’ve Got That Old Feeling, and received a Grammy nomination for her own recording, Simple Pleasures (1990). And in 2001 she won a Grammy, in the Best Country Instrumental category, for her 2000' album Fair Weather.

Stolen Moments, 2005, in Brown’s estimation, is her most musically successful record to date. "For the first time, I feel like I’ve created a true hybrid sound that suggests its influences – bluegrass, jazz, celtic music – but when taken as a whole isn’t any one of these things." – Brown's words about the album on the group's official webpage. In 2007, Brown was honored as one of Irish America magazine's Stars of the South.

Alison Brown continues touring with her band, Quartet internationally. As a famous Harvard university alumnus, she was invited to play at the inauguration of Harvard's new president, Dew Faust.

Recorded under Vanguard Records: