Her mother and elder sisters were all skilled in "Physick and Chirurgery" and she learned from them. Nothing is known of her father.
From 1639 to 1646 Woolley worked as a servant for an unnamed woman, almost certainly Anne, Lady Maynard (d. 1647), during which time she learned about medical remedies and recipes. She married Jerome Woolley, a schoolmaster, in 1646 and together with him ran a free grammar school at Newport, in Essex. This is very near the Maynard family's house at Little Easton. In the school she put into practice her skills at "physick". A few years later, the Woolleys opened a school in Hackney, London. She had at least four sons and two daughters, and the marriage was remembered by Hannah as a happy one.
She was widowed in 1661, and from that year on began publishing books on household management. She covered such topics as recipes, notes on domestic management, embroidery instruction, the etiquette of letter writing, medicinal advice, and perfume making. These proved to be very popular. Her first book, The Ladies Directory, was published at her own expense in 1661, and this was soon reprinted in 1664. Her second book, The Cooks Guide, was printed at her publisher's expense and is dedicated to Maynard's daughter, Lady Anne Wroth (1632–1677), and her own daughter, Mary.
Woolley earned a reputation as a successful physician, despite her amateur status and the unwelcoming environment for female medical practitioners at that time in history. She used her books as an advertisement for her skills, and invited her readers to consult her in person.
She remarried in 1666 at St. Margaret's, Westminster, to Francis Challiner, a widower two years older than herself, but he died before February 1669. Her date of death is unknown. She did not react, as she had done previously, to another plagiarised work of 1675 called The Accomplish'd Ladies Delight, so it is likely that she did not live to see it appear.
An unauthorised work based on her books was published in 1673 as The Gentlewoman's Companion. Similar unauthorised works followed: in 1675 The Accomplished Ladies Delight, and in 1685 The Compleat Servant-Maid. Like her authentic works, these were reprinted frequently. There has been little critical discussion about Woolley until recently, and scholarly writing on her works remains quite limited. Most academic conversations concerning Woolley focus primarily on her position as a female in a traditionally male market and her opinion on women's education. However, recent publications suggest that future discussion of Woolley may expand to include conversations about the fluidity of authorship during the 17th century and the shifting definition of authorial ownership.