The roots of her skill can be traced to her upbringing and education. Born in Wellington, New Zealand to theatrical parents (her father was a director, her mother, an actress), Campion displayed an early interest in art; she was also an accomplished, but idiosyncratic artist, with an eye toward the unusual. (This would later manifest in her use of camera angles and in the set pieces she created in her films.) Although interested in acting, Campion studied anthropology in college and later ventured to Europe where she studied art in Venice. Migrating to London, she found work as an assistant to a director of commercials and documentaries before she moved to Australia. Enrolling in art school, Campion began to experiment with film and shot her first short, "Tissues", about a father who had been arrested for child molestation. Furthering her education at the Australian Film, Television and Radio School, Campion went on to complete several award-winning shorts, including "Peel" (1982), centering on a power struggle over discipline between a child and his father, and her thesis, "A Girl's Own Story" (1984), which introduced her themes of women, sexuality and rites of passage.

After marking time in the Women's Film Unit, a government-sponsored program for which she directed the short "After Hours" (1984), about sexual harassment, and a detour to TV with the longform "Two Friends" (1986), Campion made her feature debut with the darkly stylish "Sweetie" , a disturbing study of familial tensions brought about by a mentally unstable young woman. Acclaimed for its visual style, strong performances and comic originality, "Sweetie" earned prizes from the Film Critics Circle of Australia and the Los Angeles Film Critics Association.

Campion's second feature "An Angel at My Table" was originally intended as a TV-movie. Working from a script by Laura Jones, adapted from the autobiography of New Zealand writer Janet Frame, the director fashioned a biopic that detailed an unconventional story. Tracing Frame from her awkward childhood through a nervous breakdown and stay in a mental institutions to her eventual fulfillment as a writer, Campion once again displayed a flair for observant detail and lush visuals. It is an intimate look at an atypical central figure, a shy, plain woman who defines herself through her writing.

In 1984, fresh out of film school, Campion began working on a screenplay about the colonial past of New Zealand. Over nearly a decade, she developed the project into what became her most acclaimed feature to date, "The Piano", an intensely erotic story told from the female perspective. The story is fairly simplistic: a mute woman (Holly Hunter) enters into an arranged marriage and moves halfway around the world with her illegitimate daughter (Anna Paquin) and her piano. Her new husband (Sam Neill) refuses to transport the instrument and sells it to a settler gone native (Harvey Keitel). The purchaser agrees to return the piano if the woman teaches him how to play. Again Campion's hallmarks of gorgeous photography (the landscape almost becomes another character) and strong performances align to produce a remarkably original Gothic drama. "The Piano" earned numerous awards, including the Palme d'Or at Cannes (the first for a woman director). Campion became only the second woman nominated for the Best Director Academy Award. Although she lost in that category, she did win for her screenplay, as did Hunter for Best Actress and Paquin for Best Supporting Actress.

Campion's long awaited follow-up was an adaptation of Henry James' novel "The Portrait of a Lady", written by Laura Jones and starring Nicole Kidman. Critics were divided; some found it static and miscast, while others praised its intelligence and the director's injection of sexual matters hinted at in the original. Next Campion and her sister Anna co-wrote the screenplay for her next directorial effort, "Holy Smoke" (1999), in which an Australian family hire a noted cult deprogrammer (Harvey Keitel) to retrieve and restore their errant daughter (Kate Winslet) from an Indian guru. Their subsequent battle of wills, which as in all Campion efforts also takes on an overpowering sexual component, drives the narrative, but while the film starts out extremely promising and Campion teamed with yet another actress as fearless as she is talented, the ultimate execution was flawed, murky and unsatisfying.

A planned reunion with Kidman was in store for Campion's next effort, "In the Cut" (2003), an adaptation of Susanna Moore's novel, but the ever-in-demand Kidman's schedule required her to cede the role to another actress (though Kidman stayed on a producer). Campion cast a maturing Meg Ryan, looking to break out of her sterotypical adorable parts, as a troubled New York writing professor who, after becoming involved in a crime, becomes embroiled in an erotic and dangerous affair with a police detective. Once again, Campion put the psycho-sexual politics of her characters in sharp relief and had a willing collaborator in Ryan, who agreed to a controversial full frontal nude scene, but again the outcome was uneven, with the director's singular vision bogged down by the conventional thriller elements grafted onto the story.