Born in Shanghai to father Peng Boshan (1910-1968) and mother Zhu Weiming, Peng Xiaolian experienced the terror of political persecution of her father as a young child. During the Cultural Revolution, she was sent down to Jiangxi Province for 9 years, before making her way into the prestige Beijing Film Academy. She studied in the same directing class with film directors like Chen Kaige, Tian Zhuangzhuang, and Li Shaohong, who are known as China's Fifth-Generation filmmakers.
Peng Boshan was the Minister of Propaganda in Shanghai when he was arrested for being a friend of Hu Feng (1902-1985), an important literary critic who also founded the progressive magazines like July and Hope. As other close friends of Hu Feng, Boshan was condemned as a core member of the "Hu Feng Counter Revolutionary Clique" and suffered both imprisonment and in labor camp. This family tragedy has a big influence on Xiaolian, who vividly depicts the terrifying memories in a 1987 novella "On My Back" , a 1997 short story titled "To That Faraway Place" , and in her 2009 documentary Storm under the Sun that she co-directed with S. Louisa Wei.
When China's Cultural Revolution began in 1966, her mother began to suffer brutality from the Red Guards. Such nightmarish experiences never fade and evokes many works with a suffering mother based on her own. The ultimate terror of the family came in 1968 when his father was beaten to death. Even years later, she insisted on writing about the chaotic years and the aftermath in fictions like novel Shanghai Story, novella “Holding up the Book I Read Everyday" and novella “Childhood: Secrets of Four Seasons".
Like millions of her generation, she was sent down to the countryside for "reeducation" by peasants during the Cultural Revolution. Even though spending nine years in the countryside of Jiangxi province, not many works of hers except for "Burning Connections" write about the experience. In 1978, she entered the prestige Beijing Film Academy, together with Li Shaohong, Chen Kaige, Tian Zhuangzhuang, etc. who would later be known as China's Fifth Generation film directors.
Upon graduation from Beijing Film Academy in 1982, Peng was assigned to work in Shanghai Film Studio, where she first worked as an assistant director. Only three years later, she was given a teenage film Me and My Classmate to direct. The film was a success and snatched several top awards in China. As a reward, she was a given a chance to direct a film that she had wanted to direct: Women's Story (1988). This film made her known to the world, not only by entering festivals like The Creteil Women's International Film Festival and Hawaii International Film Festival, but also praised for its strong feminine subjectivity and its portrayal of rural Chinese women.
In 1989, Peng won a script award for her script "Difficult Truth" at Rotterdam Film Festival, but could not make the film in China due to the tightening ideology. She thought about leaving China and the success of her first two films helped to win a Rockfeller scholarship. She enrolled in the MFA program in New York University and graduated in 1996. Although she did manage to complete a single film in New York, life experience in New York did inspired many fiction works, including novellas “The Abingdon Square”, “Burning Connections”, “A Drop of Ram Shit” sets in New York, “Exile’s Return” and “On the Way Home”--all collected in her novella collection titled On the Way Home
Peng returned to China in 1996, and directed A Dog to Kill (1997), Once Upon a Time in Shanghai (1998), Keke's Magic Umbrella (2000), Shanghai Women (2002), Shanghai Story (2004), Shanghai Rumba (2006) and Shanghai Kids (2008), which made her known as a representative figure in presenting Shanghai culture.
Peng started to publish short stories from the 1980s and has published collections of short stories and novellas, one novel, and four book-length memoirs.