Cam was born at Abingdon, Berkshire (now Oxfordshire). Educated at home by her father William Herbert Cam, the headmaster of Abingdon School, she did her undergraduate degree at Royal Holloway College gaining a First in History there, and later an MA in Anglo-Saxon and Frankish studies at the University of London, after a fellowship year at Bryn Mawr College This degree led to her first book, Local Government in Francia and England, 768-1034 (1912).
After teaching at Cheltenham Ladies' College and Royal Holloway, she became a fellow of Girton College, Cambridge in 1921. In 1948 she took up the Zemurray Radcliffe Professorship at Harvard, a position she held until her retirement in 1954.
Cam's focus was on local administration, as opposed to the constitutional and legal history of the dominant historians of the age, Stubbs and Maitland. Though an admirer of both, she greatly expanded on and revised the work of these men. Her work was of great scholarly value, but she was also able to write successfully for a wider audience, illustrated best by her England before Elizabeth (1950). She also had an interest in historical fiction, expressed in Historical Novels (1961). She strongly resented the whitewashing of particular historical figures, such as Richard III.
In 1945 she was elected to the British Academy, the third woman to be elected to the fellowship, and in the same year she became the first woman to deliver the Raleigh Lecture there. Cam was elected a Fellow of the American Academy of Arts and Sciences in 1950. She received honorary doctorates from Smith College, Mount Holyoke College, the University of North Carolina, and Oxford. She acted as vice-president both of the Selden Society and of the Royal Historical Society. In 1957 she was appointed CBE.