Born in New York City, she was the daughter of Frances (née Price) and Joseph Shakow. Her father was an outfitter, who provided equipment to polar explorers; her mother was a homemaker. Shakow was a 1948 graduate of Swarthmore College in Pennsylvania and gained bachelor's and master's degrees from the University of Oxford in 1950 (two years rather than three) and 1954 respectively. Tutored by both A. J. P. Taylor and Isaiah Berlin, she asked the former to be her doctoral supervisor, but Taylor disapproved of the PhD which he did not consider worthwhile. She received her doctorate in History from Harvard in 1957.
Steiner specialised in foreign relations, international relations, 20th century history of Europe and of the United States.Richard J. Evans has described her two volumes in the Oxford History of Modern Europe (The Lights That Failed and The Triumph of the Dark) as the "standard works" on international diplomacy between the two world wars.
From 1968 to 1995, Steiner was a Fellow of New Hall (now Murray Edwards College) of the Cambridge University. In 2007, she was elected a Fellow of the British Academy (FBA), the UK's national academy for the humanities and the social sciences.