Westwood was seventeen when her parents bought an office in the North of England. She studied at the Harrow School of Art (later to become the University of Westminster) for one term. Vivienne went on to attend Trent Park Collge and later taught at a primary school in North London. She loved teaching.

Vivienne's first husband was Derek Westwood, with whom she had a child named Ben. Their marriage lasted three years before she met Malcolm McLaren, later known for being the manager for punk band The Sex Pistols. The two had a son named Joseph, and Westwood continued to teach until 1971, when Malcolm decided to open a shop, Let It Rock (also known as Sex, Too Fast To Live Too Young Too Die, Seditionaries) where Westwood began to sell her outrageous designs. During this period, Westwood, McLaren, and artist Jamie Reid were influenced by the Situationists. She still owns the shop, which is at 430 King's Road, and sells her Anglomania label from there. The shop is now known as World's End.

The punk style began to gain notoriety when the Sex Pistols wore clothes from Westwood and McLaren's shop at their first gig. The "punk style" included BDSM fashion, bondage gear, safety pins (taking inspiration from Richard Hell, a personality in the early New York punk rock scene), razor blades, bicycle or lavatory chains on clothing and spiked dog collars that were used as jewellery, as well as outrageous make-up and hair.

The inclusion of more traditional elements of British design, such as tartan fabric, amongst the more unusual elements of her style only served to make the overall effect of her designs more shocking.

Together, Westwood and McLaren revolutionised fashion, and the impact is still felt today.

Westwood's first runway show was the Pirate collection in London, in March 1981. Her design style had evolved so that her main interests included not only the youth and street culture but also tradition and technique.

Westwood worked historical factors into her collection by using historical 17th-18th century original cutting principles and modernising them. This collection was about 'gold and treasure, adventure and exploration'. Other influences in Westwood's work have included ethnic Peruvian influence, feminine figure, velvet and knitwear. A historical influence has always shown in her work.

In December 2003, she and the Wedgwood pottery company launched a series of tea sets featuring her designs.

Her first major retrospective of her work was shown in 2004-2005 at the Victoria and Albert Museum, London, and the National Gallery of Australia. The exhibition is made up of around 145 complete outfits, grouped into the themes which have dominated her work from the early 1970s to the present day and were drawn from her own personal archive and the V&A's extensive collection. They range from early Punk garments to glamorous 'historical' evening gowns. The retrospective is touring the world and is set to continue until 2008.

In September 2005, Westwood joined forces with the British civil rights group Liberty and launched exclusive limited design T-shirts and baby wear bearing the slogan I AM NOT A TERRORIST, please don't arrest me. Westwood said she was supporting the campaign and defending habeas corpus. "When I was a schoolgirl my history teacher, Mr. Scott, began to take classes in civic affairs. The first thing he explained to us was the fundamental rule of law embodied in habeas corpus. He spoke with pride of civilisation and democracy. The hatred of arbitrary arrest by the lettres de cachet of the French monarchy caused the storming of the Bastille. We can only take democracy for granted if we insist on our liberty", she said[citation needed]. The sale of the £50 T-shirts raised funds for the organisation.

Her Autumn/Winter 2005/06 Propaganda Collection drew inspiration from her archive, reinterpreting designs using Wolford’s exclusive knitting technology, who she has worked in close collaboration with since 2003.

Westwood accepted a DBE in the 2006 New Year's Honours List "for services to fashion", and has twice earned the award for British Designer of the Year.

In May 2006, Westwood wrote a poem and provided personal photographs eulogising Swallows Wood, a Nature Reserve near Tintwistle where she was born and grew up. The Reserve is threatened with destruction by the construction of the Longdendale Bypass.